Want us to help you with anything?
Request a Call back

This field is required Only alphabetes are allowed
This field is required Only alphabetes are allowed
Please enter valid number
Please enter valid email
Please select product type
Please enter valid pincode

Thank you for your request.

Your reference number is CRM

Our executive will contact you shortly


2 mins Read | 4 Years Ago

What is the difference between FD and RD

What is the difference between FD and RD?


Who doesn’t love a risk-free investment? Particularly in India, the popular financial philosophy is to maximise savings and keep your money secure, while letting it grow at a steady pace. That is why both Fixed Deposits and Recurring Deposits are floated as the ideal investment options for many.

However, when it comes down to it, what are the essential differences between the two? And which one of these qualifies to be the perfect financial option for you? Let us take a closer look at the features and differences between a Recurring Deposit and a Fixed Deposit account.

Fixed Deposits and Recurring Deposits

Fixed Deposit accounts are a form of fixed income product offered by banks whereby one can deposit a certain amount as savings, earn interest and agree not to withdraw it until the maturity date. On the other hand, a Recurring Deposit is a type of fixed income product by which one can regularly deposit a fixed amount and earn interest applicable to the resultant savings.

Both Fixed Deposits and Recurring Deposits essentially offer an option for people to protect their finances while enjoying high interests on their savings. They both also share a number of similarities:

  • They can both be used as collateral for availing of loans.
  • They both require you to provide a nominee to be the beneficiary of your eventual income.
  • Incomes generated by both are taxable under Income Tax laws.
  • An early withdrawal from both types of accounts typically invite a penalty.

Difference between FD and RD

Here are the key differences between FD and RD:


Fixed Deposit (FD)

Recurring Deposit (RD)

Initial Lump Sum

Requires a lump sum deposit at the start

Requires periodic contributions

Deposit Frequency

One-time lump sum deposit

Regular deposits

Interest Calculated

Interest is calculated on the entire principal amount over a fixed tenure

Interest is calculated on the reducing balance method: each monthly deposit is treated as a new deposit and the interest earned increases as the principal amount grows


Fixed duration ranging from 7 days to 10 years

Fixed duration, generally from 6 months to 10 years

Monthly Contributions


Requires fixed monthly payments unless it's a flexible deposit like iWish Goal Based Savings


Offers less flexibility for deposits and withdrawals

Offers flexibility with monthly deposits


Higher overall returns due to lump sum investment

Lower overall returns due to regular, smaller investments

Suitable For

Suitable for individuals with a lump sum amount to invest

Suitable for individuals with regular income looking to save

Risk Tolerance

Lower risk due to fixed investment amount

Lower risk due to disciplined savings

Penalty for Missed Payment

There is no penalty for missed payments as the amount is deposited in one go

Generally imposes a penalty for missed payments. But RDs like iWish from ICICI Bank have no such penalty

Interest Calculation

Interest calculated on the initial deposit amount

Interest calculated on the monthly contributions

Therefore, we can see that while both serve as excellent savings options, Fixed Deposits tend to edge out with greater benefits. Fixed Deposit accounts offer more flexibility with their range of tenure, provide higher returns and are ideal for anyone seeking to invest any amount of money for a given period of time.

Fixed Deposit accounts are often the difference between storing idle money and reaping handsome, monetary rewards. So, if you are on the lookout for the most flexible and profitable Fixed Deposit account in the market, you can use ICICI Bank’s Fixed Deposit calculator to determine the principal amount, tenure and interest rates perfect for you. Choose from a tenure ranging from 7 days to 10 years, and watch your money grow with guaranteed returns and without any market risks.

If you are a customer, Apply for Fixed Deposit here

If you are not a customer, Apply for Fixed Deposit here


For disclaimer, Click Here.

People who read this also read

View All


View All
2 mins Read | 1 Month Ago
How to use ICICI Bank FD Calculator to plan FD investment returns
Fixed Deposits

Scroll to top