What is the Difference Between RD and FD?

Difference Between RD and FD

The low interest rates that bank FDs are offering currently, have forced the investors to consider other investment options. While the interest rates on bank FDs might not be revived soon, you can think of investing in post office FDs, NPS, NSC, and other instruments for maintaining a steady growth for your savings. Here are the five investment options that can help you earn better returns than bank FDs: 

Post Office FDs 

Though the bank FD rates today are low, the post office FDs still offers a decent interest rate on the deposits. The post office FD scheme offers 1, 2, 3, and 5-year FD plans. There is no upper cap for the 1, 2, and 3-year FDs but the 5-year plan allows you to invest only up to Rs. 1,50,000 per year. Also, premature withdrawal requests are accepted only if your deposits complete 6 months from the investment date and you only receive interest based on the post office savings interest rate if you withdraw your deposits before maturity. 


NSC i.e. The National Savings Certificate offers a high interest for your deposits. The interest gets compounded after every year but you get it only at maturity. Also, the interest earned in the fifth year is taxable as per the tax bracket in which your income falls. 


Senior Citizen Savings Scheme (SCSS) is another government-backed scheme that offers high and stable returns to investors. However, it is only applicable for individuals who are above 60 years of age. The interest earnings can be withdrawn every quarter but the lack of flexible tenor and the option of reinventing the returns only once may make it a less lucrative option for you. 


SDP i.e. Systematic Deposit Plan offered by Bajaj Finance is a monthly investment plan that allows you to start making monthly deposits as small as Rs. 5000. The number of deposits should be greater than 6 and less than 48 and it also varies as per the SDP variant you prefer to invest in. 

The Single Maturity Scheme provides one day on which all your deposits can be withdrawn. It means that only the first deposit is locked in throughout the tenor whereas the tenor of the remaining deposits is adjusted according to the maturity date. This variant helps you to collect a corpus without depositing a bulk amount. 

The Monthly Maturity Scheme is another variant of SDP that allows you to set the same tenor for all the deposits. As the deposits mature one after the other, you get the interest accrued amounts successively. These proceeds can be used to manage your extra expenses or can be reinvested in another SDP account. 

Invest in company FDs 

If you wish to achieve swift growth for your savings with an instrument that also safeguards your capital, you can invest in Bajaj Finance FD. It is a company FD that offers an FD interest rate of up to 6.75%. It has also received the highest credit ratings from credit rating agencies like CRISIL and ICRA. It means that your deposits are safe in this FD scheme. 

Alongside of the highest FD rates today, you get a tenor range between 1 to 5 years that is flexible to incorporate your financial plans. You can also choose to invest in multiple fixed deposits at once by opting for its multi-deposit facility. This facility helps you invest in more than one FD at once through a single cheque. Also, you can choose a different tenor, amount, and FD type for every deposit. 

The online investment process that Bajaj Finance FD offers through the online FD form lets you invest comfortably and also gives you a chance of earning interest at a 0.10% higher FD rate. If you are older than 60, you will get a 0.25% additional fixed deposit rate irrespective of the mode of investment selected by you.


Investing money in a bank FD will not prove to be as profitable as it was before as bank FD rates have been reduced considerably. However, you can still earn a decent interest income by investing in SCSS, NSC, or post office FD. SDP will help you achieve a considerable growth for your savings without depositing a lump sum amount. Or else, you can also get high returns by investing your corpus in Bajaj Finance FD that is offering one of the highest interest rates in India today. Apart from the highest interest rates, this FD scheme also provides a flexible tenor, seamless investment options, and safety for your investment.