Which is better: FD or RD?

It depends on your liquidity. If you have a lump sum amount, FD is better as it starts earning interest on the full amount immediately. If you want to save monthly from your salary, RD is the ideal choice.

How is interest calculated on FD?

In India, bank FDs calculate compound interest on a quarterly basis. Formula: A = P x (1 + r/4)^(4n). Post Office FDs are also compounded quarterly.

Is FD interest taxable?

Yes, FD interest is fully taxable as per your income tax slab. If interest exceeds ₹40,000 in a year (₹50,000 for senior citizens), the bank deducts TDS at 10%.

Can I break my FD before maturity?

Yes, banks allow premature withdrawal but often charge a penalty of 0.5% to 1% on the interest rate. Tax-saving FDs (5 years) cannot be broken before maturity.

FD / RD Calculator India - Fixed & Recurring Deposit Interest

Fixed Deposit (FD) vs Recurring Deposit (RD)

When it comes to guaranteed returns in India, Fixed Deposits (FD) and Recurring Deposits (RD) are the most trusted instruments. They are offered by all banks (SBI, HDFC, ICICI, etc.) and the Post Office.

What is a Fixed Deposit (FD)?

In an FD, you invest a lump sum amount for a fixed tenure (7 days to 10 years). The bank guarantees a specific interest rate at the time of booking, which remains unchanged throughout the tenure, regardless of market fluctuations.

Best for: People with a lump sum amount (bonus, property sale, inheritance) looking for safety.

What is a Recurring Deposit (RD)?

An RD allows you to invest a fixed monthly amount for a fixed tenure. It is like an SIP but for a bank deposit. The interest rate is usually the same as that of an FD.

Best for: Salaried individuals wanting to build a savings corpus month-on-month.

Online FD & RD Calculator

Total Investment₹ 1 L

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Interest Rate (% p.a)7 %

Time Period (Years)5 Yr

Invested Amount

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Total Interest

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Maturity Value

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Taxation on Deposits

Interest earned on both FD and RD is fully taxable as per your income tax slab. If the interest income exceeds ₹40,000 (₹50,000 for senior citizens) in a financial year, the bank will deduct TDS at 10%.

Feature	Fixed Deposit (FD)	Recurring Deposit (RD)
Investment Mode	Lump-sum	Monthly installments
Min Tenure	7 Days	6 Months
Interest Rate	Same for both	Same for both

You can submit Form 15G (or 15H for seniors) to the bank if your total annual income is below the taxable limit, to avoid TDS deduction.