Why does FD usually beat RD?

An FD compounds the entire principal from day one. RD instalments compound for progressively shorter periods, so the average compounding time is roughly half.

Are FD and RD interest taxed the same way?

Yes — interest from both is added to your income and taxed at slab. TDS @10% kicks in if total interest > ₹40,000 (₹50,000 for seniors).

Finance

FD vs RD Calculator

FD vs RD is one of the most common questions for risk-averse savers. We model both with the right compounding (quarterly for FD; standard Indian RD formula) so you can see — for the same total cashflow — exactly which one matures higher and by how much.

Verdict

RD wins

By ₹12,97,760

₹8,48,867

at maturity

Principal: ₹6,00,000
Interest: ₹2,48,867

₹21,46,627

at maturity

Invested: ₹6,00,000
Interest: ₹15,46,627

FD wins when you have a lumpsum upfront — the full amount earns interest from day one. RD wins for disciplined monthly saving but loses to FD on equal-rate terms because instalments compound for less time.

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Frequently asked

Why does FD usually beat RD?: An FD compounds the entire principal from day one. RD instalments compound for progressively shorter periods, so the average compounding time is roughly half.
Are FD and RD interest taxed the same way?: Yes — interest from both is added to your income and taxed at slab. TDS @10% kicks in if total interest > ₹40,000 (₹50,000 for seniors).

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