Recurring Deposit (RD) vs Fixed Deposit (FD): Yield, Liquidity & Tax Comparison
Renjith Pillai
Senior Systems Architect & Financial Analyst
Both Fixed Deposits (FD) and Recurring Deposits (RD) offer guaranteed returns backed by the DICGC ₹5 Lakh RBI deposit insurance. The core difference lies in cash flow structure: FDs require a lump sum, while RDs automate monthly savings.
Quarterly Compounding Math in Indian Banks
Most Indian banks compound interest quarterly on both FDs and RDs. In an RD, each monthly installment earns interest for a different duration—the first installment earns interest for 12 months, the second for 11 months, down to the last installment earning for 1 month.
Frequently Asked Questions
Is TDS deducted on RD interest?+
Which gives higher effective yield: FD or RD?+
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Calculate FD & RD Maturity Yields →Renjith Pillai
Senior Software Engineer & Network Specialist
Renjith Pillai is a senior software engineer and financial tools author with over 12 years of experience. He built EasyCalcs.in to provide high-precision, privacy-first technical tools and financial calculators for investors, engineers, and consumers.