Understanding FD vs RD: Benefits and Limitations
A popular way of saving and earning interest in banking and investment is through Fixed Deposits (FDs) and Recurring Deposits (RDs). While both serve different financial goals and needs, they are both term deposits and are issued by banks. FDs in most cases have a lump sum investment made for a fixed period, while RDs focus on a monthly investment made throughout a chosen timeframe. In this article, we will discuss the advantages and disadvantages of both FDs and RDs, which will aid you in your financial objectives and preferences. Recurring vs Fixed Deposit With a Fixed Deposit, an amount is deposited for a minimum of seven days to a maximum of ten years, thus earning interest on the investment. Fixed Deposits can be suitable for investors looking to invest a large amount of funds and who appreciate high returns. On the contrary, Recurring Deposits are made through monthly instalments for a specified period. RDs promote disciplined saving and are perfect for individuals with a steady...