iWish Flexible RD vs Recurring deposit vs fixed deposit -interest rates, tax benefits and advantages

December 12, 2018

When it comes to choosing investment products, most investors opt for Fixed Deposits (FDs) and Recurring Deposits (RDs). The main reason for this choice is that both FDs and RDs are risk-free investment products that offer fixed returns over a period. Unlike equities, both these products are not subject to the performance of the market, thereby providing an excellent option for conservative investors.

While both these products may look similar, they have plenty of differences and cater to specific requirements. Here, in today’s article, you can find the differences between FD and RD, so that you can choose the right product to meet your investment goals.

What is a Fixed Deposit?

As the name implies, here you deposit a fixed amount for a particular tenure – which can range from as short as 7 days to as long as 10 years. The interest earned on your deposit is credited to your account – monthly, quarterly or reinvested in your principal. The fixed deposit interest rates remain the same for the entire duration of your investment.

What is a Recurring Deposit?

Here, you deposit a particular amount at regular intervals. Most recurring accounts provide investors with the option of depositing a fixed amount every month and the interest is earned on a monthly basis. At the time of maturity, you receive both the amount invested and the interest earned on it. The RD interest rates remain fixed for the entire duration of the investment, just like the FD.

What is the iWish flexible Recurring Deposit?

It is a flexible recurring deposit, where instead of a fixed sum invested monthly, you can invest any amount at any time, during the term period. It offers added convenience to a regular RD account. The iWish account is available to all Internet Banking customers of ICICI Bank, at no extra cost.

Why Choose a Fixed/Recurring/Flexible Recurring Deposit?

All these three popular investment options offer you higher returns compared to a regular savings bank account. The other benefits include:

  • Secured investment option with guaranteed returns
  • You choose the tenure as well as the amount of investment
  • You can apply for a credit card or a loan, using your FD and RD account as collateral
  • Multiplies your savings, helping you meet your financial goals
  • Above all, gets you started with the practice of investing your money, instead of letting it remain idle in your bank account.

A Head-on Comparison – FD vs RD vs iWish flexible RD

Interest Rates (per annum) FD interest rates range from 2.50%-5.50% RD interest rates range from 3.50%-5.50% iWish has the same interest rates as RD from 3.50%-5.35%
Available Tenure 7 days to 10 years

6 months to 10 years

6 months to 5 years

Minimum deposit amount 10,000 INR

500 INR

50 INR

Next deposit amount Not applicable, since an FD is a one-time investment Multiples of 100 Any amount
Deposit Date Once at the start of the investment A fixed date every month Any date you wish
Number of deposits every month Not applicable, since you invest only once at the beginning of the FD Only one Any number of times, you wish
The penalty for missing deposits Not applicable, since it’s a one-time investment Yes, the penalty for missing monthly instalments is charged on the interest rate as Rs.12 for every Rs.1000 No penalties. You can skip deposits anytime you wish
Premature withdrawal You can choose an FD with or without premature facility

You can prematurely close your RD and iWish account. If done, the amount is credited to your account, after deducting premature withdrawal penalty and adjusting interest rates accordingly.

Tax Benefits You can open a tax saving FD with a lock-in period of five years, to avail tax benefits under Section 80C. The interest on fixed deposits for tax-saving is higher than regular FD.

No. Tax Saving benefits available in an RD or the iWish.

Which one to choose from Recurring Deposit, Fixed Deposit or iWish flexible RD?

All these three products offer different benefits. If you have a lump sum of money and looking to invest it immediately, then you can open an FD. Additionally, if you are looking to save tax on FD, then you can opt for a Tax Saving FD.

On the other hand, if investing a lump sum is not possible and you can only afford a small sum every month, then an RD works better for you. Alternatively, if you would like to contribute varying sums every month or don’t know if you can invest continuously every month, then the iWish RD is ideal for you.

Make sure to go through the features of all these three investment products to pick the right one that meets your specific investment goals.



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