Fixed & Recurring Deposits at a glance
- What it is
- A fixed deposit (FD) locks a lump sum for a chosen tenure at an agreed interest rate; a recurring deposit (RD) lets you deposit a fixed amount every month for a set tenure.
- Who it is for
- Savers who want predictable returns and capital protection over a fixed period.
- How Early Grow helps
- We help you compare deposit options, tenures and payout choices, and explain how interest is taxed.
- Next step
- Book a free consultation or call +91 93541 57455.
Fixed Deposit & Recurring Deposits
Fixed Deposits (FDs) and Recurring Deposits (RDs) are popular investment options offered by banks and financial institutions.
Fixed Deposits (FDs):
- Time deposit with fixed interest rate and maturity period.
- Locked-in deposit for specified period (e.g., 6 months to 10 years).
- Higher interest rates than savings accounts.
- Low-risk investment.
Types of FDs:
- Standard FD
- Tax-Saving FD (80C benefit)
- Senior Citizen FD (higher interest rates)
- Flexi FD (flexible withdrawal)
- Cumulative FD (interest compounded)
Recurring Deposits (RDs):
- Regular savings plan with fixed installments.
- Fixed interest rate and maturity period.
- Flexible tenure (e.g., 6 months to 10 years).
- Low-risk investment.
Types of RDs:
- Standard RD
- Flexi RD (flexible installments)
- Monthly RD
- Quarterly RD
- Savings RD (with insurance benefits)
Benefits:
- Low risk
- Fixed returns
- Liquidity (partial withdrawal)
- Flexibility
- Tax benefits (80C)
Key Features:
- Interest Rate
- Maturity Period
- Minimum Deposit
- Maximum Deposit
- Withdrawal Rules
Eligibility:
- Resident Indians
- NRIs (Non-Resident Indians)
- Minors (with guardian)
Documents Required:
- Identity Proof (PAN, Aadhaar)
- Address Proof (Utility bills)
- Age Proof (Birth certificate)
- Income Proof (Optional)
Tax Implications:
- Interest earned is taxable
- TDS (Tax Deducted at Source) applicable
- 80C benefit for tax-saving FDs
Official references
Frequently asked questions
A Fixed Deposit (FD) is an investment where you deposit a lump sum amount with a bank or financial institution for a set period. You earn a fixed interest rate on your deposit over the chosen term. The rate is fixed when you open the deposit and is not affected by market movements. Deposits with banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per depositor per bank; corporate deposits with NBFCs are not covered by this insurance.
A Recurring Deposit (RD) allows you to save a fixed amount each month. The amount you deposit earns interest at a fixed rate over a period. It's a great way to save if you have a steady income and want to build savings gradually.
In an FD, you deposit a lump sum amount for a fixed period. You earn interest on this amount, and at the end of the term, you get the principal plus the interest. The interest rate remains the same throughout the term.
In an RD, you deposit a fixed amount every month for a set period. The total amount you save earns interest, and after the term ends, you receive the total amount along with the interest.
Feature
Fixed Deposit (FD): One-time lump sum deposit
Recurring Deposit (RD): Monthly deposits
Tenure:
FD: Flexible, from 7 days to 10 years
RD: Fixed, typically 6 months to 10 years
Interest Rates:
FD: Generally higher
RD: Slightly lower than FD rates
Withdrawal:
FD: Can be withdrawn early, with penalties
RD: Can be closed early, but no partial withdrawals allowed
Best For:
FD: People with a lump sum to invest
RD: People who want to save regularly every month
Fixed Deposit (FD): One-time lump sum deposit
Recurring Deposit (RD): Monthly deposits
Tenure:
FD: Flexible, from 7 days to 10 years
RD: Fixed, typically 6 months to 10 years
Interest Rates:
FD: Generally higher
RD: Slightly lower than FD rates
Withdrawal:
FD: Can be withdrawn early, with penalties
RD: Can be closed early, but no partial withdrawals allowed
Best For:
FD: People with a lump sum to invest
RD: People who want to save regularly every month
Yes, both FD and RD interest are taxable. You will pay tax on the earnings based on your tax slab. If the interest exceeds a certain limit, tax will be deducted at source (TDS).
FD: Yes, you can withdraw early, but there may be penalties, and you may earn less interest.
RD: You can close an RD early, but it usually comes with penalties, and you can’t make partial withdrawals during the term.
RD: You can close an RD early, but it usually comes with penalties, and you can’t make partial withdrawals during the term.
If you miss a monthly deposit, there may be penalties or the RD could be treated as closed. It’s best to ensure you make the deposit on time to avoid such issues.
Yes, many banks offer loans against FDs. You can usually borrow up to a certain percentage of your FD amount at a fixed interest rate. Loans against RDs are less common but may be available in some cases.
Yes, you can save tax by investing in Tax-Saving Fixed Deposits, which have a 5-year lock-in period. They allow you to claim deductions under Section 80C of the Income Tax Act, though the interest earned is still taxable.
Fixed Deposit: Ideal if you have a lump sum amount to invest and want a fixed, predictable return.
Recurring Deposit: Perfect if you want to save a fixed amount regularly every month and earn interest on it.
Recurring Deposit: Perfect if you want to save a fixed amount regularly every month and earn interest on it.
Opening an FD or RD account with EarlyGrow is easy. Simply visit our Investment Services page for detailed steps, or reach out to our team for help in getting started.
Talk to an Early Grow adviser
Tell us what you need and we will explain your options, the documents required and the next steps. The first consultation is free.