Why FD is better Than RD ?

Lets do a Small Math!

Let's imagine a deposit of Rs 24000 for 1 year on FD and one RD. Let us understand the reason for the less interest yield from RD than FD through the calculation technique. We have tried our best to take the calculation through the eyes of a layman.

FD Calculation:- 

The deposit amount is termed as Principal = Rs 24000

Let the annual rate of interest offered by a bank  be 5.6%

Rs 24000 deposit for a year  at the rate of interest 5.6 %

24000*( 5.6/100) = 1344 -- interest

Year-end = 24000+1344 =25344 --- Maturity Amount

RD Calculation :- 

Maturity Amount RD : 24,728 INR vs FD 25,344 INR 

With the above justification on interest yields, you could understand why FD is better than RD!

Happy savings!