FD Vs. RD: Which One Is The Best If You Are A Pensioner?

FD Vs. RD: Which One Is The Best If You Are A Pensioner?


Being a pensioner, you can’t take risks with your investments. That is why you should learn about the difference between FD and RD to see which one is more beneficial.

Your investment plans and methods are determined on the basis of your income. That is why these schemes change after you retire. As your fixed income doesn’t remain the same and you can’t risk the money due to old age, you have to opt for different investment options. Recurrent Deposit and Fixed Deposit schemes are the most preferred in these cases.

However, you may need to choose only one of them. So, which one will you pick? In case you can’t decide, here are some factors that will help you out. These aspects will show you the benefits of each scheme. This way, you will be able to determine by yourself which one suits you better.

#1 Investment Manner

In the case of an RD, you will have to separate out a specific amount of money every month or in a pre-determined period. You will have to do this until the maturity date is reached. After that, you will get all your deposited amount with the earned interest.

On the other hand, FD doesn’t require you to spare any amount repetitively. You just need to provide the bank or organization with a lump sum amount for a fixed period. These funds will get locked for the tenure. Once the maturity date is reached, you will get that fixed sum, along with pre-determined FD interest rates.

As your monthly income isn’t fixed, FD seems to be a better option here. You can deposit your savings or other funds under the scheme and remain care-free until the maturity date arises.

#2 Interest Pay-Out

Interest pay-out means you will get the earned interest every month or every year, whichever you prefer. Here, your principal amount will remain safe with the bank or organization, and you will keep on earning the interest on it throughout the tenure.

This feature isn’t available with the RD plans because they don’t have any fixed amount of deposit. Instead, you need to put money in it every month. That is why there is no scope for an interest pay-out.

If you want the benefit, you will have to go for an FD scheme. It provides you with the option of withdrawing your earned interest on a monthly or yearly basis. This is much beneficial in the case of pensioners as these funds can aid your monthly expenses. So your funds will serve as a source of income for you, and you won’t have to worry about managing every month’s expenditures.

#3 Overall Earnings

Banks and other financial institutions provide interest on the money that you keep under their protection. The more the deposited amount, the better the earnings. This shows that you will get a better return on your FD than RD because a fixed and high amount is kept under the bank’s protection.

Even if the RD interest rates are slightly higher than FD interest rates, FD will still be a beneficial option for you.


All in all, we can say that FDs are much better for pensioners in comparison to RDs. An FD keeps your money safe, provides the facility of interest pay-out, and offers higher returns. Therefore, you should prefer it.