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What is the difference between Recurring Deposit and Fixed Deposit?

Today I will discuss “Difference between Recurring Deposit and Fixed deposit”.

The Recurring Deposit (RD) and fixed deposit (FD) is investment tool in which people can invest it and earn some interest. The fixed deposit is also known as term deposit because the money is invested for fixed period. Both the investment option is good to earn some money in the form of interest if the money is kept ideal. If a person has a regular income he can invest in recurring deposit very easily and if any person wants to invest in only one time than he/she can invest in fixed deposit. If interest on these investment is more than Rs. 10, 000 than the investment holder has to pay tax on it. There is a penalty on withdrawal of the amount from these investments before maturity period.

S. No.
Point of difference
Recurring Deposit
Fixed Deposit
1.
What is recurring deposit and fixed deposit?
It is an investment product in which small amount of money invested to earn interest on it.
It is an investment product in which lump sum amount of money invested to earn interest on it.
2.
Investment pattern
In this investment small amount of money is invested for a fixed period of time.
In this investment lump sum amount is invested for a fixed period of time.
3.
Easy or difficult to invest money in it
It is very easy to invest money in recurring deposit.
It is difficult to invest money in comparison to fixed deposit.
4.
Minimum amount of investment
The minimum amount of investment in recurring deposit is Rs. 100 or Rs. 500. It depends on financial institutions.
The minimum amount of investment in recurring deposit is Rs. 1000 or Rs. 10, 000 etc. It depends on financial institutions
5.
Duration of investment in recurring deposit and fixed deposit
The duration of investment in recurring deposit is 1 year to 10 years.
The duration of investment in recurring deposit is 7 days to 10 years.
6.
Loan facility is provided on recurring deposit and fixed deposit
There is a loan facility is provided in recurring deposit, in which the interest rate is higher than the normal recurring deposit interest rate i.e. 0.5%.
There is a loan facility is provided in fixed deposit, in which the interest rate is higher than the normal fixed deposit interest rate i.e. 0.5% to 2%.
7.
The amount of interest high or low in recurring deposit and fixed deposit
The amount of interest is low in recurring deposit in comparison to fixed deposit because every month money is invested and the initial investment is Rs. 100
The amount of interest is high in fixed deposit because lump sum amount invested in it, on which interest rate is applicable.
8.
Maturity amount of recurring deposit and fixed deposit
Maturity value of recurring deposit is low in comparison to fixed deposit
Maturity value of fixed deposit is high in comparison to recurring deposit
9.
TDS applied on recurring deposit and fixed deposit
Tax deductable  at source (TDS) is not applied on recurring deposit if interest is not more than Rs. 10, 000
TDS is applicable on fixed deposit. If interest is more than Rs. 10, 000 @ 10%.

TDS: It is tax deductable at source which is deducted by an employer from an employee salary before making payment to him.

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