FD requires a lump sum upfront; RD requires a fixed monthly deposit. Choosing depends on whether you have a lump sum or a regular monthly surplus.
Choose FD when you have a lump sum and do not need the money for the chosen tenure. Use our FD calculator or FD maturity calculator.
Choose RD when you can save a fixed amount every month. Check RD calculator and RD maturity calculator.
If you already have the money, an FD is almost always better; if you do not, the RD forces you to save and is much better than not saving at all. That covers 90% of the choice. The remaining 10% is about goal date — short-term goals (under three years) favour FD or RD over equity, while long-term goals (over seven years) favour equity SIPs over either deposit type, because the post-tax compounding gap becomes too large to ignore.
A practical hybrid that many Indian families use: park the lump sum (bonus, gratuity, insurance maturity) in a 1–3 year FD so it starts compounding from day one, and run a parallel RD from the salary account so the same goal is being filled from two directions. When the FD matures, decide whether to roll it into another FD or move it into a debt fund based on the rate cycle and the time left to the goal.
Same total saved, but the FD ends with ₹66,000 more — the cost of saving in monthly drips rather than as a lump sum.