Which Type Of Deposit Account Offers Better Returns?

by Shashank Bhaskar Finance Adviser

Money is a tool to help you fulfil all your expectations and lead a secure future. You work hard to earn it and are concerned for its safety. Banks are the safest places to deposit your earnings and see them multiply over time. They offer interest on all Savings and Deposit Accounts depending on the account type chosen.

A term or Fixed Deposit helps you accumulate a savings corpus for future and urgent fund requirements. Upon maturity, you receive the investment amount with interest. None of the Deposit Accounts gets linked with the market and is a pure savings instrument without risks. You open the account by approaching the bank directly or digitally through the banking app.


FD is a long-term investment in which you deposit a large sum at once and withdraw it after the chosen maturity period. You receive the interest in your Savings Account either monthly or quarterly.

For a Recurring Deposit Account, you need to select the tenure between one year to 10 years for every bank or institution you choose. But you need not make a lumpsum one-time deposit. Instead, you deposit a fixed sum monthly and earn interest on it. You receive your total investment with interest upon maturity. The interest stays the same throughout the investment period.


If you are curious to know the returns, understand that the Fixed Deposit interest rates are higher than the Recurring Account. Your period interest earned is higher because it applies to a lump sum amount annually. As for the Recurring account, you begin with a small amount and increase it gradually.

The FD calculator is an online instrument that helps you check the exact returns rate on the deposit. It is accurate, fast, and user-friendly. Access them any time of the day from banking websites and adjust the variables accordingly. There are no limitations to using this calculator, and it is a boon for all depositors.

Which one to choose?

The decision largely depends on your financial status. If you do not have a significant investment amount but wish to accumulate regular savings, a Recurring Deposit is perfect. You keep a fixed sum aside monthly so that it does not weigh upon your expenses. Time the deposit to meet holiday or child’s higher education expenses.

If you receive a lump sum amount as a salary bonus, for example, invest it in a term deposit and spend the funds for higher expenses like buying a new car. They are popular with senior citizens because they invest their retirement benefits and choose long term quarterly or monthly pay-outs, ensuring cash flow.

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About Shashank Bhaskar Innovator   Finance Adviser

14 connections, 1 recommendations, 65 honor points.
Joined APSense since, August 9th, 2018, From Mumbai, India.

Created on Aug 30th 2021 04:42. Viewed 72 times.


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