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Differences Between Recurring Deposit and Fixed Deposit

How Does The Fixed Deposit and Recurring Deposit Schemes Work?

Fixed Deposit and Recurring deposit are two most popular investment schemes in India, specially for the risk averse investors. The major advantage of investing your money in a fixed deposit scheme or recurring deposit plan is that there are fixed returns with no risk. But many a times, investors get confused if they have to invest in a RD plan or a FD scheme. Both RD and FD are fixed income products that are offered by all major banks and financial institutions. In both the schemes, you can invest a specific amount and on the amount invested, you will receive a fixed interest. At the end of tenure, investors will receive both the capital as well as the interest.

Major Difference Between FD and RD

When we talk about RD and FD, there is one single important difference that you must be aware of, before we talk about other differentiating points. While both RD and FD runs over a tenure, FD investors can deposit an amount once while RD investors must deposit a fixed amount at regular intervals.

Fixed Deposit

  • Customers who opt for fixed deposits will have to choose a tenure, which usually ranges from 7 days to 10 years, and must deposit an amount once. The interest on the amount will be credited to the investor’s account on a monthly or a quarterly basis.

Recurring Deposit

  • When it comes to recurring deposits, investors can deposit a fixed amount every month and can earn interests. The interest is paid along with the capital at maturity.

Recurring Deposit vs Fixed Deposit

Features / Scheme Fixed Deposit Recurring Deposit
Tenure Usually, for FD schemes, the tenure ranges between 7 days to 10 years. The investor can choose a tenure that he is most comfortable with. Tenure for Recurring deposits usually vary from 1 year to 10 years. The customer has to deposit a fixed amount at regular intervals over the tenure.
Investment Limit There is no limit on the amount that can be invested in a fixed deposit scheme. But, this limit generally depends on the bank and the minimum investment is Rs. 100 and multiples while the maximum limit is Rs. 1.5 lakh. While there is no prescribed minimum or maximum limit, this usually depends on the bank. Many banks have the minimum investment limit as Rs. 1000 and and the maximum limit as Rs. 15 lakhs per month.
Rate of Return For a period of an year, the interest rate varies between 6.96% to 8.00%. The interest rate depends on the capital and tenure opted for. The interest rate for FD is slightly higher than that of RD. The interest rate varies between 5.25% to 7.90% for a tenure of one year. The rate of interest usually depends on tenure and monthly investment amount.
Tax benefits For fixed deposit, a tax exemption under the section 80C of Income Tax Act 1961 is applicable. Income tax will be not deducted if the interest you earn on your rd is up to Rs.10,000.
Documents Required Identity Proof and address proof. Customers will have to submit documents like PAN card, passport and income documents, if required. Address proof and Identity Proof. Investors will have to submit documents like PAN card, passport and income documents, if required.
Income Interest Interest earned on your FD is taxable and most of the banks deduct TDS. Interest earned on your RD is taxable and most banks do not have the facility of TDS.
Additional Benefits Loan Facility
Eligibility
  • Resident Individuals
  • Hindu Undivided Families
  • Public and Private Limited Companies
  • Trusts and Societies
  • Resident Individuals
  • Trusts and Societies
  • Hindu Undivided Families
  • Public and Private Limited Companies
Withdrawal At the end of tenure. Premature withdrawal is allowed with penalty. At the end of opted tenure. Premature withdrawal is allowed with penalty.

What Should You Choose - RD or FD?

For people who do not have a lump sum to invest in a FD, but can afford a small portion of investment amount from income every month, a recurring deposit (RD) seems to be the right fit. Both RD and FD are best suited for risk averse investors who are mostly in the lower tax slab. Use an online recurring deposit calculator to see what suits best for the amount that you can invest. Although one single investment product cannot meet all needs, a RD is preferred by many because it puts considerably less financial strain and gives almost the same returns as FD.

Read More Article on Recurring Deposit

Recurring Deposit - Sitemap
Recurring Deposit by Banks
Recurring Deposit by other Institutions

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RD Reviews

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  • Saraswat Bank Recurring Deposit
    "Good Savings"
    SARASWAT COOPERATIVE BANK
    0.5 4.0/5 "Great!"
    I have chosen for five year recurring deposit in Saraswat bank because they are providing 8% of interest for the RD holders. I can invest the minimum of Rs. 10 to max amount, the customer support is professional interms of resolving the queries.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jul 15, 2019
  • HDFC Bank
    HDFC Bank Recurring Deposit
    "Flexible recurring deposit"
    HDFC BANK
    0.5 3.0/5 "Satisfactory"
    I am having recurring deposit with Hdfc bank, they are providing standard interest rate but now its dragging down. I can deposit from Rs. 500 to 1 lakh, I have opt for one year of tenure, the online facility is very good even I have option to close through netbanking.
    Was this review helpful? 1
    , thane
    Reviewed on Jul 03, 2019
  • HDFC Bank Recurring Deposit
    "Good online feature"
    HDFC BANK
    0.5 4.0/5 "Great!"
    My bank is offering 7.8% of interest for the recurring deposit that is for one year, customer can deposit maximum of Rs.2 lakhs. They have one year of duration, they used to resolve my RD queries on time and I get statement as well. The interest rate can be improved. The HDFC online facility is very good to open and close the RD account.
    Was this review helpful? 0
    , chennai
    Reviewed on Jul 02, 2019
  • ICICI Bank Recurring Deposit
    "EXCELLENT"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I have taken a R.D with the ICICI BANK where the account has been opened trough online also the banking process was good and simple. I am investing the R.D for monthly once through auto debit from the account. The application is easy added on that they are giving good rate of interest.
    Was this review helpful? 1
    , bangalore
    Reviewed on Jul 01, 2019
  • HDFC Bank Recurring Deposit
    "Comfortable RD"
    HDFC BANK
    0.5 4.0/5 "Great!"
    HDFC norms is pretty good, I can do everything through online they give all the information, I can deposit minimum of Rs. 1000 and I have maximum tenure of five years. They are providing 6.3% to 7% of interest based on the tenure, the customer support is also helpful.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jun 30, 2019
  • SBI Recurring Deposit
    "Its Good"
    STATE BANK OF INDIA
    0.5 5.0/5 "Blown Away!"
    Compared to other bank SBI is providing good interest for the recurring interest. Minimum can deposit from Rs. 1000 to Rs. 1.5 under tax cover and I have option to extend the duration from one year. They need some improvement on their customer service.
    Was this review helpful? 2
    , mumbai
    Reviewed on Jun 29, 2019
  • Kotak Recurring Deposit
    "Good"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I have a Recurring Deposit account with Kotak Mahindra Bank since all my transactions are done with them and also the interest rate is very good in the market. I have opened before one year with my own interest. The locking period is one year. I am doing monthly investment and the statements are clear.
    Was this review helpful? 0
    , chennai
    Reviewed on Jun 28, 2019
  • Citibank Recurring Deposit
    "Smart Investment"
    CITIBANK
    0.5 5.0/5 "Blown Away!"
    We can easily create a recurring account through Citi bank netbanking. Hence I don't want to visit third party app, every month automatically the money debits from Citi bank account, everything is linked in one app so I don't want to sign anything in the bank form. Customer can deposit from Rs.1000 and max, they are providing some good interest and they do have minimum period of three months.
    Was this review helpful? 1
    , bangalore
    Reviewed on Jun 25, 2019
  • review Recurring Deposit
    "Good Profitable investment"
    STANDARD CHARTERED BANK
    0.5 5.0/5 "Blown Away!"
    They are giving best time duration for the recurring deposit and they are providing attractive interest its profitable for the customer. Recently I took for one year for that they quoted the interest of 7.25%, I have analyzed the interest with other banks but Standard Chartered is best.
    Was this review helpful? 0
    , noida
    Reviewed on Jun 24, 2019
  • ICICI Bank Recurring Deposit
    "Good Investment"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I have one recurring deposit investment in ICICI bank, I invest Rs. 2000 per month it has the duration of five years. Then after maturity I get Rs. 84,000, the online option is very convenient, I can activate and deactivate the service through online without visiting to the bank. I am getting alert message from their end.
    Was this review helpful? 1
    , mumbai
    Reviewed on Jun 24, 2019
  • Karnataka Bank Recurring Deposit
    "Good for investment"
    KARNATAKA BANK
    0.5 5.0/5 "Blown Away!"
    I have monthly investment of Karnataka recurring deposit of Rs. 2000 for the duration of two years, even I have option to extend the duration. I hope they are providing 14% of interest for two years, its higher than other banks. There is no charges for the liquidly of pre mature. I have online option its easy to track RD details.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jun 21, 2019
  • Kotak Recurring Deposit
    "Good to go"
    KOTAK MAHINDRA BANK
    0.5 5.0/5 "Blown Away!"
    In Kotak there is maximum tenure of one year for the RD deposits, minimum customer can invest from Rs. 2000 to 10,000 on monthly basis. I have option to track the recurring deposit details through online. The customer executives are friendly interms of handling queries, I believe they are providing around 6% on yearly basis.
    Was this review helpful? 1
    , chandigarh
    Reviewed on Jun 21, 2019
  • SBI Recurring Deposit
    "Safe and secured"
    STATE BANK OF INDIA
    0.5 5.0/5 "Blown Away!"
    RD facility is very good in SBI, I have chosen 10 years of tenure its safe and secured. I can track the details through online netbanking some time I go to bank to make the RD deposit or I can make it through online transaction, the staff are helpful. There is no charges for the pre mature withdrawal.
    Was this review helpful? 2
    , kolkata
    Reviewed on Jun 13, 2019
  • HDFC Bank Recurring Deposit
    "Good RD"
    HDFC BANK
    0.5 3.0/5 "Satisfactory"
    When i apply the salary account, they have provided me a RD account. Once the salary is credited, they will deduct the recurring deposit amount of Rs. 1000. I did not aware of the interest rate and there is no lockin period. I never interacted with the customer care service so far. They are not sending the notification when they deduct the amount from my account.
    Was this review helpful? 3
    , bangalore
    Reviewed on Jun 11, 2019
  • YES Bank Recurring Deposit
    "Good investment for future"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    I use YES bank for RD purpose, I can opt for minimum of 9 months to max tenure period. Their interest rate is normal as like other bank and there is no maintenance fee. If I want to withdraw the money before the tenure period I need to visit to the bank with the documents.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jun 11, 2019
  • HDFC Bank Recurring Deposit
    "Very much userfriendly"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    Long back from HDFC bank I have opened recurring deposit, I have opt for three months of tenure period, but I taken the money in four months. The interest rate is nominal as per RBI guideline, I done the process through online. Therefore everything was great.
    Was this review helpful? 2
    , new delhi
    Reviewed on Jun 07, 2019
  • ICICI Bank Recurring Deposit
    "Excellent banking services"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I have a recurring deposit in ICICI which is children based RD. Somebody suggested me to take the ICICI. They have provided me a interest rate of 7.25% and there is no additional charges are required. Almost 1 year back, i put the money. I can able to withdraw the money after 2 years.
    Was this review helpful? 0
    , bangalore
    Reviewed on May 28, 2019
  • ICICI Bank Recurring Deposit
    "Good for future"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    For the future purpose, i have invested my Recurring deposit in ICICI. This is a best platform to save the money for future purpose like child's marriage and education. Some interest rate they are providing but i don't have any idea. There is no other additional charges. I'm investing the money through online.
    Was this review helpful? 1
    , bangalore
    Reviewed on May 28, 2019
  • HDFC Bank Recurring Deposit
    "Its Good"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    Two years back I had a recurring deposit in HDFC Bank, the process was very easy because I opened and closed through online. They are very genuine in terms of interest , there is no charges applicable for the pre matured, I can liquidate the fund after certain amount,
    Was this review helpful? 0
    , chennai
    Reviewed on May 26, 2019
  • ICICI Bank Recurring Deposit
    "Good for future"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    For the future purpose, i have invested my Recurring deposit in ICICI. This is a best platform to save the money for future purpose like child's marriage and education. Some interest rate they are providing but i don't have any idea. There is no other additional charges. I'm investing the money through online.
    Was this review helpful? 1
    , bangalore
    Reviewed on May 24, 2019
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