Fixed Deposit vs Recurring Deposit – Which is Better?Purchase & Refinance Mortgage LoansUpdated on Jul 4, 2019 View more like this | Visit India, UN | Contact samrat saini |
Fixed deposits and recurring deposits are 2 of the most popular investment options available in the Indian financial market. Both offer a sizable interest rate along with guaranteed returns.
FDs and RDs are offered by almost every financial organisation including non-banking financial institutions. However, these have some unique properties which make it suitable for different types of investments. You should know all about fixed deposits vs. recurring deposits and where should you invest to benefit from these.
Where Should you Invest??
Let’s take a look at the FD vs RD differences and know which option to go for.
1- Interest Rate – Interest rate for a recurring deposit usually ranges from 5% to 7%, whereas FD interest rate ranges from 8% to 9%. Fixed deposit can fetch you a higher income from interest across the same investment tenor.
2- Deposit – A basic fixed deposit vs recurring deposit difference is in how the investment is made. A fixed deposit is a one-time investment where you deposit the entire sum and lock-in for a pre-decided investment tenor. For example, you can invest in Bajaj Finance Fixed Deposits with only Rs. 25,000 as a one-time investment and choose flexible lock-in periods between 12 to 60 months according to your requirements.
For recurring deposits, you invest a certain sum periodically during the whole tenor.
3- Payout – Recurring deposits return the invested amount along with interest-only after maturity, whereas fixed deposits offer periodic returns on the interest earned. It is advantageous for individuals who want to create a supplementary source of income throughout the lock-in tenor. An FD investment thus comes in handy throughout the tenor.
4- Loan Facility – You cannot avail a loan against your invested amount of an RD. However, this facility is available if you opt for a fixed deposit. Companies like Bajaj Finance offer loans of up to 75% on their Cumulative FDs and up to 60% against the amount invested in Non-Cumulative FDs.
5- Investment Tenor - Another fixed deposit vs recurring deposit difference is in their investment tenor period. Usually, lock-in periods for RDs range from a minimum of 6 months to up to 10 years whereas FDs offer tenors ranging from 12 months to 60 months. You can also renew the investment after its maturity to get better benefits.
Both FDs and RDs are excellent investment options, but with their greater returns, higher interest rates, flexibility, and one-time payment, fixed deposits offer more convenience and RoI for individuals who want long term assured returns against their investment.
FDs and RDs are offered by almost every financial organisation including non-banking financial institutions. However, these have some unique properties which make it suitable for different types of investments. You should know all about fixed deposits vs. recurring deposits and where should you invest to benefit from these.
Where Should you Invest??
Let’s take a look at the FD vs RD differences and know which option to go for.
1- Interest Rate – Interest rate for a recurring deposit usually ranges from 5% to 7%, whereas FD interest rate ranges from 8% to 9%. Fixed deposit can fetch you a higher income from interest across the same investment tenor.
2- Deposit – A basic fixed deposit vs recurring deposit difference is in how the investment is made. A fixed deposit is a one-time investment where you deposit the entire sum and lock-in for a pre-decided investment tenor. For example, you can invest in Bajaj Finance Fixed Deposits with only Rs. 25,000 as a one-time investment and choose flexible lock-in periods between 12 to 60 months according to your requirements.
For recurring deposits, you invest a certain sum periodically during the whole tenor.
3- Payout – Recurring deposits return the invested amount along with interest-only after maturity, whereas fixed deposits offer periodic returns on the interest earned. It is advantageous for individuals who want to create a supplementary source of income throughout the lock-in tenor. An FD investment thus comes in handy throughout the tenor.
4- Loan Facility – You cannot avail a loan against your invested amount of an RD. However, this facility is available if you opt for a fixed deposit. Companies like Bajaj Finance offer loans of up to 75% on their Cumulative FDs and up to 60% against the amount invested in Non-Cumulative FDs.
5- Investment Tenor - Another fixed deposit vs recurring deposit difference is in their investment tenor period. Usually, lock-in periods for RDs range from a minimum of 6 months to up to 10 years whereas FDs offer tenors ranging from 12 months to 60 months. You can also renew the investment after its maturity to get better benefits.
Both FDs and RDs are excellent investment options, but with their greater returns, higher interest rates, flexibility, and one-time payment, fixed deposits offer more convenience and RoI for individuals who want long term assured returns against their investment.
