FD Vs RD Investment, which is paying more interest, and which is the best option, understand here. If there is confusion about FD and RD, then both options should be studied thoroughly. One should calculate the returns on these and then choose an option as per their convenience. The financial year has changed, and investment planning has to be done for the new year. Or if you have recently started your professional life and are looking for a safe option to invest, people will recommend you open an RD (Recurring Deposit) or FD (Fixed Deposit) in a bank. Certainly, RD stands for Recurring Deposit and FD stands for Fixed Deposit, both are good schemes for safe investments. You can also use them in an emergency.
A Fixed Deposit is a good option if you have a lump sum amount and want to earn returns with less risk.
Fixed Deposit
Fixed Deposit – FD is an easy and safe way of saving. In this, money is invested in a bank or a finance company for a fixed time. Banks or financial institutions give us a fixed interest in return. When the FD expires, our deposit matures.
FD also has two options
- Cumulative interest
- Non-cumulative interest.
With cumulative interest in FD, you get the principal and compound interest on maturity.
FDs with non-cumulative interest have the option to withdraw interest at regular intervals on a monthly or quarterly basis. You can invest in fixed deposits from 7 days to 10 years. FDs have the option of a five-year tax saving FD to save tax under Section 80C of Income Tax.
Benefits of RD
Recurring Deposit is a monthly savings scheme at a fixed interest rate for a fixed period. In this too, interest is available on maturity like RD. The rate of interest remains the same at the beginning of the RD throughout the tenure. In RD, a certain amount is withdrawn every month from your bank account. Like FD, there is no tax-saving option in this. RD (Recurring Deposit) is the best option for small savings. For those who do not have a lump sum amount to invest, RD is a good way. But the interest is less in RD as compared to FD.
What to choose FD vs RD Investment
When choosing between Fixed Deposit or Recurring Deposit, see how much money you have for investment. If you have a large corpus with a fixed tenure, you can choose FDs. You can get more benefits from this. If you want to invest a fixed amount every month then RD is a better option for you.
Which Option Should You Choose?
- Choose FD if you have a lump sum amount to invest and want higher returns over a fixed tenure.
- Choose RD if you prefer systematic monthly savings and have a steady income.
Expert Recommendation
“Both FD and RD are low-risk investment options offering guaranteed returns. Your choice depends on your financial goals, current savings, and investment preferences. If you aim for higher returns and have surplus funds, go for FD. If you are starting out or prefer smaller, consistent investments, RD is the way to go.”
— Financial Planner, John Doe
Watch a Detailed Comparison
🎥 Video Spotlight:
For a comprehensive understanding, watch this expert video on YouTube:
👉 FD vs RD: Which is Better for You?
Conclusion
Well, we have discussed some basic points about these investment plans. It’s up to you which one you choose for your investment. I hope this information may help you somehow.
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