The primary difference between FD (Fixed Deposit) and RD (Recurring Deposit) lies in how you deposit money and the interest payout structure. 1. Fixed Deposit (FD): One-time Lump Sum Deposit: In FD, you deposit a lump sum amount in one go. Deposit Duration: The money is locked for a fixed tenure, typically ranging from 7 days to 10 years, and the interest rate is fixed for the entire term. Interest Rate: Interest is usually higher compared to savings accounts. It’s fixed at the time of the deposit and does not change throughout the tenure. Interest Payment: Interest can be paid monthly, quarterly, annually, or at maturity, depending on the terms chosen. Premature Withdrawal: FD allows premature withdrawal, though it may incur a penalty (lower interest rate) in some cases. Risk: Low risk, as returns are guaranteed. 2. Recurring Deposit (RD): Periodic Deposits: In RD, you make regular monthly deposits over a fixed period. The amount is smaller but consistent, usually starting from ₹500 or ₹1,000 per month. Deposit Duration: Typically, RD tenures are 6 months to 10 years. Interest Rate: Like FD, the interest rate is fixed at the time of opening the RD and does not change during the tenure. Interest Payment: Interest is paid either at the end of the term or periodically, depending on the bank’s policy. Premature Withdrawal: RDs can also be withdrawn prematurely, but there may be penalties, and the interest rate could be lower than what was promised. Risk: Low risk, as it’s essentially a fixed-income product. Key Takeaways: FD requires a one-time lump sum deposit, while RD involves monthly contributions. Both offer fixed interest rates, but FD is more suited for those who have a larger sum to invest upfront, and RD suits those who prefer to save smaller amounts regularly over time. Both are safe investment options, especially for risk-averse investors.

Dear Client, Fixed Deposit (FD) and Recurring Deposit (RD) are both safe options for savings, however they present different investment styles and payment structures. They do put forth the option to earn interest at fixed rates over a set period of time. Differences: FD: One-time lump sum investment. Interest is fixed for the tenure. Suitable for people with surplus funds. RD: Regular monthly/periodic deposits of smaller amounts. Builds savings gradually with discipline. Suitable for professional staff or which have a small lump sum. Common features: Features of which to note:. Also both of them are low risk and they also guarantee return. Tenure is flexible (months to years). Interest earned is subject to income tax. In short, FD’s do well for large one time investments, while RD’s better for those that prefer to save in regular installments. I hope this answer helps you to resolve the queries. If the issue still persists, please contact our law firm. Thank you!