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Fixed Deposits vs Recurring Deposits

What is the difference between Fixed Deposits and Recurring Deposits?

Fixed Deposits (FD) and Recurring Deposits (RD) are two of the most utilised forms of investments that offer high interest rates and returns.
Fixed Deposits are instruments where your investment remains locked for a specified period. Recurring Deposits are instruments where you deposit a fixed amount each month for a specific time.

Features and Benefits of FD and RD
Here’s a brief lowdown on the features and benefits of Fixed Deposits and Recurring Deposits. Read along to know more about them.

1. Returns on investment
With FDs, you can earn interest on the entire amount deposited on monthly, quarterly or half-yearly basis.
On the other hand, interests on RDs are on a recurring basis. For example, with an RD of 1 year, the first deposit will earn you interest of 12 months, the second deposit for 11 months and so on.
Hence, you can earn more on the same investment amount with an FD as compared to an RD, because of the benefit of compounding.

2. Investment tenures
With Bajaj Finance Fixed Deposits, you can choose your tenors, which range between 12 and 60 months. The tenors for Recurring Deposits range from around 6 months to up to 10 years.

3. Tax benefits
Taxes are charged when the total interest income in a year exceeds Rs. 10,000. The total interest income is calculated based on the interest earned in a year with savings accounts, FDs and RDs.

4. Interest rates
The RD and FD interest rates are somewhat similar; however, one will earn more with an FD on the same interest rate and tenor as compared to an RD.
With Bajaj Finance, get higher interest rate up to 8.75% on Fixed Deposits. You can also get 0.25% higher interest with our special 15-month FD. On Senior citizens FD, you will get 0.35% more interest.
You can start investing in a Fixed Deposit that is rated MAAA (stable) by ICRA and FAAA (stable) by CRISIL. Our FD Calculator can help you calculate your returns quickly, and you can start investing with a minimum amount of Rs. 25,000.

Want to open FD Account now? Read How to Open Fixed Deposit Account

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