Question 1

What is the difference between FD and RD?

Accepted Answer

A Fixed Deposit (FD) is a one-time lump sum investment made for a specific period. A Recurring Deposit (RD) allows you to deposit a fixed amount every month for a specific period. Both offer guaranteed returns.

Question 2

How is Fixed Deposit interest calculated?

Accepted Answer

In India, most banks compound Fixed Deposit interest quarterly. This means the interest earned in the first quarter is added to the principal, and you earn interest on the new total in the next quarter.

Question 3

Are FD and RD returns taxable?

Accepted Answer

Yes, the interest earned from both FDs and RDs is fully taxable according to your income tax slab. Banks may also deduct TDS (Tax Deducted at Source) if the interest exceeds ₹40,000 per year (₹50,000 for senior citizens).

FD & RD Calculator (Fixed & Recurring Deposit)

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