Which is the better option to invest in FD or RD?

FD(Fixed Deposit) or RD(Recurring Deposit)? Which is a better option? 

Is it always a good idea to invest money for the long-term on FD? Can all online banks give the same interest rate despite market margin? What is bank interest in detail? How will it be helpful to earn more with RD?

What is Recurring Deposit or RD?The RD is an investment that provides an income for a fixed period of time, and is similar to a time deposit in a bank.

A Recurring Deposit (RD) is a time-deposit or savings scheme that provides an interest rate equal to the prevailing bank rate, plus a fixed amount of interest called the 'premium'.

A Recurring Deposit is a Deposit where you deposit an Amount on a Fixed Date and dates in between for a fixed period of time to earn Interest.

Whereas, What is a Fixed Deposit? A fixed deposit (FD) is a banking instrument called a time deposit.   A fixed deposit is opened with a bank or a financial institution in India. The depositor makes an initial investment, and after that deposit amount, the money cannot be withdrawn for a stipulated period of time. There are some risks associated with this type of investment, but it also has its advantages if they are handled properly

The decision of investing your money in fixed deposit or RD depends on a few things. The interest rates offered for both the products are not the same. So depositors get higher returns on FD's than on RD. But there are certain other factors that will come into play before you decide to put your money in either one of these options.

An investment in Fixed deposits or Recurring Deposits is the most obvious choice for investing money. RD has advantages as well as demerits over fixed deposit.

In order to determine which is a better option to invest; you must analyse the investment opportunities and prospects for growth in both the funds. While deciding for your final choice, be sure to consider return on investment, tax withholding benefits, management charges etc from both of them.

Also Read: What is Fixed Deposit (FD)? Benefits of a Fixed Deposit