💰 FD vs RD: Which Gives Higher Returns on ₹5 Lakh in 5 Years?
When comparing a Fixed Deposit (FD) and a Recurring Deposit (RD) for a 5-year investment of ₹5 lakhs, the key difference is how you invest money over time and how interest is calculated.Let’s break it down simply.🏦 What are FD and RD?📌 Fixed Deposit (FD)Fixed Deposit
👉 If you earn monthly and want discipline → RD is ideal Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
- You invest a lump sum (₹5 lakh at once)
- Fixed interest rate for the full tenure
- Interest is compounded (quarterly/monthly depending on bank)
- You invest monthly installments
- Same total amount builds up over time
- Interest is lower on early contributions (because money is added gradually)
- 💵 Total investment: ₹5,00,000
- ⏳ Tenure: 5 years
- 📈 Interest rate (assumed average): 7% per annum
- 🏦 Compounding: quarterly (typical bank rate)
- Full ₹5 lakh invested at start
- ₹8,333/month for 60 months (to reach ₹5 lakh total)
- Entire ₹5 lakh earns interest from day one
- Compounding works on full amount
- Helps build savings gradually
- Good for monthly income earners
- 🥇 Best returns: Fixed Deposit (FD)
- 🧾 Best for savings habit: Recurring Deposit (RD)
👉 If you earn monthly and want discipline → RD is ideal Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.