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RD vs FD — monthly deposits or a lump sum upfront?

RD lets you build up savings monthly at a fixed rate; FD wants the full amount upfront. Compare both on a realistic monthly savings capacity vs an equivalent lump sum.

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RD Calculator vs FD Calculator5-year comparison

Opens Compare Lab pre-loaded with both, in your own currency — adjust any input and the chart updates instantly.

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How each one actually works
Recurring Deposit (RD)

A fixed amount deposited with a bank every month for a fixed tenure, at a fixed interest rate.

PROS
Builds a savings habit through a fixed monthly commitment
Guaranteed return, same safety profile as FD
Lower entry amount than a typical FD
CONS
Interest is taxable at your slab rate
Premature closure usually reduces the effective rate
Return capped at the fixed rate, same as FD

Best for: Building a savings habit for a short-to-medium-term goal when you don't have a lump sum to deposit upfront.

Fixed Deposit (FD)

A lump sum deposited with a bank for a fixed tenure at a fixed, guaranteed interest rate.

PROS
Fully guaranteed return — no market risk
Predictable maturity value known upfront
Widely available and simple to open
CONS
Interest is fully taxable at your slab rate every year it accrues
Return is capped — no upside beyond the fixed rate
Early withdrawal usually triggers a penalty

Best for: Capital you can't afford to risk — an emergency fund, or a short-term goal within a couple of years.

Questions
Which has a better effective return, RD or FD?

At the same headline rate, FD usually has a slightly higher effective return since the full principal earns interest from day one, while RD's deposits build up gradually — the gap is usually small but real.

Where do these numbers actually come from?

The same calculation engine that powers our standalone calculators and Compare Lab — nothing here is a separate or simplified estimate. Every assumption (rate, tenure, tax) is visible and adjustable once you open the comparison with your own numbers.

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All figures are illustrative projections based on the assumptions you select, not guaranteed returns. Validate tax and scheme rules before making financial decisions.