GUIDE
FD vs RD: What's the Difference?
Fixed deposits and recurring deposits are both deposit-based savings products, but they differ mainly in how money is contributed over time.
FD vs RD at a glance
| Feature | Fixed Deposit (FD) | Recurring Deposit (RD) |
|---|---|---|
| Contribution pattern | Usually a lump-sum deposit at the start | Regular contributions during the tenure |
| Money invested from day one | The deposited lump sum can earn interest for the chosen tenure | Each installment enters the deposit over time |
| Planning use | Useful when you already have a lump sum | Useful when you want to build savings through regular contributions |
| Calculation inputs | Principal, rate, tenure and compounding assumptions | Installment, contribution frequency, rate and tenure |
How to think about the difference
The biggest distinction is the timing of contributions. With an FD, the starting principal is deposited at once. With an RD, contributions are made periodically, so different installments are invested for different lengths of time.
Which inputs should you compare?
When comparing scenarios, keep the tenure, interest-rate assumption and tax assumptions clear. For an RD, also specify the installment amount and contribution frequency. Actual product rules should be checked with the relevant financial institution.
Calculate both scenarios
Use the main calculator to switch between FD and RD modes and test your own amounts.
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