Recurring Deposit and Fixed Deposit

The facility of a recurring deposit is available in only India; this is one of the most popular savings instruments available to investors for making investments on a long term basis. Defined as a fixed deposit or FD, with slight differences in its operational aspects, the recurring deposit involves making fixed investment every month rather than investing a big amount in one single go. Simply, saying this is the best option that is available in India for all those low income people. Although requiring the payment of equal periodic payments but on maturity the amount one can get with interest is a lump-sum figure.

On the other hand, a fixed deposit is an instrument for people or investors wishing to deposit their money for a fixed period of anywhere between 15 days or 5 years or more, giving one a higher and risk free return option these involve depositing money in one single go and the amount one receives during maturity includes the invested sum plus the interest build on it for the period the amount had been fixed.

While recurring deposit involves paying a fixed amount monthly or in any pre decided time duration, the fixed deposit is paid just once and received at the time of maturity. However, both of these can be broken in middle in case the investor requires money urgently and cannot wait for the contracted period to get over.

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