FD vs RD Calculator —
Same Money, Different Maturity

FD vs RD — Which Grows More at the Same Interest Rate?

Fixed Deposits (FD) and Recurring Deposits (RD) are both bank savings instruments offering guaranteed returns. The key difference: FD requires a lump sum investment upfront, while RD accepts monthly contributions. At the same interest rate, FD always generates higher returns because the entire principal earns interest from day one.

FD Formula: A = P × (1 + r/4)^4t where P is principal, r is annual rate, t is time in years (quarterly compounding per RBI guidelines).

RD Formula: A = P × (1 + r/400)^4N summed for each instalment where N is remaining quarters from each deposit date.

Real-Life Comparison

₹1,20,000 invested as FD (lump sum) at 7% for 12 months: maturity = ₹1,28,618. The same ₹10,000/month as RD at 7% for 12 months: maturity = ₹1,24,780. The FD earns ₹3,838 more because the full ₹1.2 lakh earns interest throughout, while each RD instalment earns interest only for its remaining months. Over longer tenures, this difference compounds significantly.

When to Choose FD vs RD

Choose FD when you have a lump sum available — from a bonus, inheritance, or asset sale. Choose RD when you want to save a fixed amount monthly from salary, like a forced savings mechanism. RD is essentially a SIP equivalent for bank deposits. For goals 1–3 years away where you want guaranteed returns, RD is ideal. For parking a windfall safely, FD is better.

Tax Treatment — Both Identical

Both FD and RD interest is fully taxable as income at your marginal slab rate. TDS is deducted at 10% if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). Unlike equity mutual funds, there is no long-term capital gains exemption — every rupee of FD/RD interest is taxable. This is why tax-free PPF (7.1%) often beats FD/RD at 7.5% for investors in the 20–30% tax slab.

Frequently Asked Questions — Explained

The most common questions we get about this calculator, answered in plain language without jargon. Understanding these answers will help you use the result in your actual financial decisions.

How accurate are these results?

Results use the exact mathematical formulas prescribed by relevant Indian regulatory bodies — RBI for banking products, SEBI for market instruments, Income Tax Act for tax calculations, and EPFO for provident fund calculations. The calculated output matches what your bank or government portal would show for the same inputs. The caveat is that real-world outcomes depend on many factors not captured in a calculator — market returns vary, tax laws change, and personal circumstances differ.

Why does the result differ from my bank's calculation?

Minor differences can arise from rounding methods and compounding frequency. Banks may use daily compounding for savings accounts, quarterly compounding for FD/RD (as per RBI mandate), and monthly reducing balance for EMI loans. This calculator uses the standard formula for each product type. If you see a significant difference, check the compounding frequency and whether the bank is including processing fees or insurance in the stated rate.

How should I use this result for planning?

Use the output as a planning baseline, not a guarantee. For investment calculators, calculate at three return scenarios — conservative (8%), moderate (12%), and optimistic (15%) — and plan for the conservative case. For tax calculators, the result shows your liability before TDS credits. For loan calculators, the EMI shown is the mathematical minimum — your actual EMI may include insurance premium or processing fee EMI.

Can I share or save this calculation?

Take a screenshot of the result page. All CalcPhi calculators run entirely in your browser — no data is stored on our servers. Refreshing the page resets the inputs. There is no account or login required, and your financial data is never transmitted anywhere.