FD and RD rates from the same bank are usually identical for the same tenure. The difference is cash flow — FD needs a lump sum upfront, RD fits monthly saving habits.
Worked examples
Naina — FD vs RD with ₹60,000 total
Naina has ₹60,000. Option A: FD of ₹60,000 for 12 months at 6.5% gives ₹63,900. Option B: RD of ₹5,000/month for 12 months at 6.5% gives ₹61,950. FD wins by ₹1,950 even with equal deposits. The difference grows with longer tenures.
Frequently asked questions
Which is better — FD or RD for a salaried person?
If you receive regular income but no large lumpsum, RD is more accessible. Once you accumulate enough, converting to FD earns more.
Is FD interest taxable?
Yes. FD and RD interest is added to your income and taxed at your slab. TDS at 10% is deducted if annual interest exceeds ₹40,000 (₹50,000 for senior citizens).