FD vs RD: Today, everyone thinks of investing. So that life can be lived in a safe way. Now, suppose you have 7 lakh rupees and want to invest somewhere for 5 years, then you think whether to invest in FD or RD. Let us know here which option will be right for investment.
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What is FD?
You have to deposit the entire amount in an FD at once. Now, if you have 7 lakh rupees, then you can deposit it once. This amount will be deposited for 5 years, and regular interest will be received on it. Regular interest will be received for 5 years, due to which you will get more money.
What is RD?
You can deposit a small amount every month in an RD. Meaning you do not have to deposit 7 lakh rupees at once. You can deposit a fixed amount every month for 5 years, for which you will get interest, but it is slightly less than an FD.
Interest rates and benefits
- General customers get 3.05 percent to 6.60 percent interest on SBI FD.
- Senior citizens can get up to 7.10 percent.
- Post Office RD gives around 6.7 percent annual interest, which is added every quarter.
- If you invest Rs 7 lakh in an FD, then after 5 years you will get around Rs 9.66 lakh. Meaning the profit will be Rs 2.66 lakh.
- On the other hand, if you deposit the same amount every month in the form of RD, then after 5 years, you will get Rs 8.34 lakh. Meaning the profit will be Rs 1.32 lakh.
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Now, what to choose between the two options
If you have a large amount at once and you want more returns, then the FD option is right. On the other hand, if you want to save every month, then an RD will be better for you. In both options, interest is taxable. However, consult a financial expert before investing.