While fixed deposits and recurring deposits are some of the most popular investment options they do have some significant differences despite being seemingly similar.


Recurring deposit

Fixed deposit

Investment limit

Rs. 1000 - 15 lakh

Rs. 100 - 1.5 lakh


1 year- 10 years

7 days- 10 years

Interest (1 year)

5.25- 7.90%

6.96- 8%

Tax benefits

Income tax will be not deducted if the interest you earn on your RD is up to Rs.10,000.

A tax exemption under Section 80C of Income Tax Act 1961 is applicable.

Income interest

Interest earned on your RD is taxable and most banks do not have the facility of TDS.

Interest earned on your FD is taxable and most of the banks deduct TDS.