Before on which one is better, it is important to understand what do these two terms mean. FD means a Fixed Deposit and RD refers to a Recurring Deposit.
In a Fixed Deposit, an applicant has to deposit a lump-sum amount for a fixed period of time before which it cannot be withdrawn. The lock-in period is decided at the time of applying for an FD. On the other hand, in a recurring deposit, an individual has to invest a specified amount of money every month on which it incurs interest. The amount of money to be invested each month and the time period for which the money is to be invested is determined by the applicant at the time of opening a recurring deposit.
The issue with a recurring deposit is that owing to the varying nature of our expenses, not many people are able to invest the amount which is required
of them each month. If they are unable to do, they incur a penalty.
In case of a Fixed Deposit
, a one-time investment is made. This means that once you have invested the money, you can altogether forget about it for the length of the lock-in period. There is no additional or monthly investment needed.
Additionally, a number of lenders provide interest rates of up to 8.75% and 9.10% for senior citizens. There is also an FD calculator which helps you calculate the amount which you stand to receive at the end of each month.