MoneyMeticStart with when you have the money
A fixed deposit generally begins with a lump sum. A recurring deposit builds through periodic installments. The useful first question is not which acronym earns more: it is whether you have the full amount today or will save it gradually from income. Comparing a year-end total of equal contributions does not make their investment time equal.
For example, ₹1,20,000 deposited at the beginning of a year has more time to earn interest than twelve ₹10,000 installments that arrive across the year. A higher maturity for the lump sum is not proof of a superior rate; much of the difference reflects time invested.
Keep the quoted rate separate from compounded growth
The rate entered in a deposit calculator and the effective growth after compounding are related but different figures. At a hypothetical nominal annual rate of 7%, quarterly compounding gives a mathematical one-year growth factor of (1 + 0.07/4) to the fourth power, or about 7.186% growth before tax.
That calculation does not mean the deposit was sold at a different quoted rate. MoneyMetic retains the rate you enter and applies the chosen compounding frequency. Match the bank’s actual convention before comparing maturity amounts, and check whether interest is reinvested or paid out during the term.
Compare the money that will actually be available
Gross maturity is the amount before the assumed tax deduction. After-tax maturity depends on your circumstances, the product and applicable rules. MoneyMetic’s deposit tax input applies a simple assumed tax to interest at maturity. It is a planning approximation, not a calculation of withholding dates or a tax return.
For an illustration with ₹7,000 of gross interest and a hypothetical 20% tax on that interest, the deduction is ₹1,400 and net interest is ₹5,600. The 20% figure is an assumption for the example, not a statement of your tax rate. Avoid treating tax withheld as necessarily equal to your final liability.
Read the access conditions before chasing yield
Ask what happens if you need the money early. The bank may apply a different interest rate, a penalty or withdrawal restrictions. For a recurring deposit, also check missed-installment rules. A small maturity advantage can disappear if the structure repeatedly conflicts with your cash flow.
For several known payment dates, compare a set of deposits maturing at those dates with a single long deposit. This is a cash-flow illustration rather than a recommendation to buy a particular product. The point is to align availability with the purpose of the money instead of choosing tenure solely from a rate table.
Understand what deposit insurance does cover
For eligible Indian bank deposits, DICGC’s FAQ states a limit of ₹5 lakh covering principal and interest per depositor per bank in the same right and capacity. Eligible balances across branches of the same bank are aggregated; opening another account there does not by itself create another limit.
Confirm that the institution and product are covered. A corporate deposit or an investment described informally as “like an FD” should not be assumed to have bank-deposit protection. Insurance coverage also does not turn every withdrawal into an instant-access transaction. Read the conditions rather than relying on the product name.
Use a simple comparison worksheet
For each option, record the initial amount, installment schedule if any, nominal rate, compounding frequency, maturity date, payout convention, tax assumption and early-access conditions. Use the same currency and comparable cash-flow dates. If one product pays income out, do not compare it with a reinvestment product while ignoring the income already received.
Run the numbers in FD & RD, then check the result against the bank’s quotation. Differences may come from deposit dates, day-count rules or bank rounding. Choose a product you understand and can hold as planned, rather than treating a few extra maturity units as the whole decision.
Compare FD and RD maturity
Use your own inputs, save a baseline and compare what changes.
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Sources checked 7 Nov 2026. Examples and planning frameworks are MoneyMetic illustrations. Rates and return assumptions are hypothetical unless stated otherwise. This article provides general education, not personalised financial, investment or tax advice.