For those looking for investment opportunities should first define the degree of investment risk they are okay with. Answering this question will help them decide the right investment tools they should choose for themselves. For instance, if you are okay with a little bit of risk you can go for varied market-linked investment schemes such as mutual funds, SIP (Systematic Investment Plan), and stock market bonds.
However, if your risk appetite is very low, you can go for non-market linked investment schemes such as Fixed Deposit or Recurring Deposit. These two are some of the safest investment schemes offering the highest return on investment. However, owing to the difference in their nature, it becomes important for people investing to contemplate their needs and choose the best option for themselves. Below are some significant and static differences between the two schemes.
However, if your risk appetite is very low, you can go for non-market linked investment schemes such as Fixed Deposit or Recurring Deposit. These two are some of the safest investment schemes offering the highest return on investment. However, owing to the difference in their nature, it becomes important for people investing to contemplate their needs and choose the best option for themselves. Below are some significant and static differences between the two schemes.
- Interest rate: FD or RD, both deposit scheme, if offered by a particular lender, will be available at same interest rate given the period of investment remains same in both cases. For instance, if you invest in an FD and an RD at the same bank or NBFC for a period of 5 years, the rate offered would be same. That said, the final return on investment may differ due to the fact that FDs are lumpsum investment and RDs are done on a monthly basis.
- Liquidity: Secondly, both RD and FD come with the same degree of liquidity. You can liquidate your RD or FD whenever you want if you are okay with penalties.
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