Fixed Deposits v/s Recurring Deposits: Which one is a Better Investment?

Type of Investment:

Fixed Deposits: 1 time, Lump-sum investment

Recurring Deposits: Regular investments

Tenure of Investments:

Fixed Deposits:
Minimum Tenure - 7 days
Maximum Tenure - 10 years

Recurring Deposits:
Minimum Tenure - 6 months
Maximum Tenure - 10 years

Minimum Investment Amount:

Fixed Deposits: ₹5,000
Recurring Deposits: as low as ₹100

Interest Rates:

Fixed Deposits:
Principal - ₹30,000 Lump-sum for 5 years
Interest - ₹12,968 @7.5%
Total - ₹42,968

Recurring Deposits:
Principal - ₹500/month for 5 years
Interest - ₹6,207 @ 7.25%
Total - ₹36,207

Which is better?

Fixed Deposit is better if you:

  • Keep more cash invested
  • For a longer tenure
  • Want tax benefits

Recurring Deposit is better if you:

  • Wish to invest small chunks
  • Over a tenure of your choice
  • Want higher liquidity

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