FD vs RD: If you have Rs 7 lakh and you want to invest it somewhere safe for the next 5 years, then this question must have come to your mind, should I do FD or RD? Both options are reliable, but their method is different.
FD vs RD: If you have Rs 7 lakh and you want to invest it somewhere safe for the next 5 years, then this question must have come to your mind, should I do FD or RD? Both options are reliable, but their method is different. Some people want to deposit a large amount at once, while some people like to save a little every month. In such a situation, it is important to know which option will give you more benefit and is closer to your needs.
What is FD?
In FD, you have to deposit the entire money at once. For example, if you have Rs 7 lakh, then you can deposit it at once. This amount will be locked for 5 years and regular interest will be received on it. After 5 years, you will get interest along with the principal amount.
What is RD?
In RD, you deposit a small amount every month. That is, you do not have to invest the entire 7 lakh rupees at once. You can deposit a fixed amount every month for 5 years. Interest is also received on this, but a little less than FD.
Interest rates and benefits
- General customers get interest ranging from 3.05% to 6.60% on SBI FD.
- Senior citizens can get up to 7.10%.
- Post Office RD gives about 6.7% annual interest, which is added every quarter.
- If you invest Rs 7 lakh in FD, then after 5 years you will get about Rs 9.66 lakh. That is, the benefit 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. That is, the profit will be Rs 1.32 lakh.
What to choose?
If you have money together and you want higher returns, then FD is right. If you want to save every month, then RD is better for you. Interest on both options is taxable. Consult a financial advisor before investing.
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