RD vs Lumpsum FD Calculator

Investment

Got a windfall? See whether investing it upfront as a fixed deposit beats dripping the same amount into a recurring deposit month by month.

Free · No sign-up · Private6 min readUpdated 27 July 2026

In short: For the same total money, a lump-sum FD almost always matures higher than an RD, because every rupee starts compounding from day one instead of trickling in over the years — but an RD is the right choice when you do not have the lump sum to invest today.

Your inputs

Results

RD maturity

₹7,19,328

Lump-sum FD maturity

₹8,48,867

Extra from lump sum

₹1,29,539

How much more the upfront FD earns

Total deposited

₹6,00,000

RD vs lump-sum FD growth

Maturity each year: money dripped in monthly (RD) versus the same total invested upfront in an FD.

Year-wise comparison

Year-wise comparison
Year	RD value	Lump-sum FD value
1	₹1,24,621	₹6,43,115
2	₹2,58,198	₹6,89,329
3	₹4,01,373	₹7,38,864
4	₹5,54,837	₹7,91,958
5	₹7,19,328	₹8,48,867

FD invests the full total upfront; RD builds it up month by month. Both compound quarterly.

Formula

FD: A = P × (1 + r/4)^(4t) vs RD: M = Σ R × (1 + i)^(quarters remaining)

P: Total money (monthly deposit × 12 × years), invested upfront in the FD
R: Monthly recurring deposit
r: Annual interest rate (decimal)
i: Quarterly rate (annual ÷ 4)
t: Tenure in years

Step-by-step calculation

Worked with the default values.

1
Total money invested
₹10,000 × 12 × 5
= ₹6,00,000
2
RD maturity (drip-fed monthly)
Σ each deposit compounded quarterly to term
= ₹7,19,328
3
FD maturity (same total, invested upfront)
₹6,00,000 × (1 + r/4)^(4t)
= ₹8,48,867
4
Difference in favour of the lump sum
FD maturity − RD maturity
= ₹1,29,539

How it works

The calculator takes your monthly RD amount and totals it over the full tenure, then invests that same total upfront in a fixed deposit for comparison.
The FD earns interest on the whole sum from day one, so every rupee compounds for the entire term.
The RD builds up gradually — later instalments compound for only a few quarters — so it ends with a smaller corpus for the same money committed.

Examples

₹10,000/month at 7% for 5 years

RD matures to about ₹7.18 lakh; the same ₹6 lakh invested upfront in an FD grows to roughly ₹8.48 lakh — around ₹1.3 lakh more.

₹5,000/month at 6.5% for 3 years

RD matures to about ₹1.98 lakh; the same ₹1.8 lakh as an upfront FD reaches roughly ₹2.18 lakh — a lump-sum edge of about ₹20,000.

Understanding the RD vs Lumpsum FD Calculator

The core trade-off: time in the market

The question this calculator answers is simple but often misunderstood: if you will commit the same total amount of money, is it better to invest it all upfront in a fixed deposit or to drip it in monthly through a recurring deposit? Holding the interest rate constant, the answer is almost always the lump-sum FD — and the reason is time.

Money invested today starts compounding today. In a lump-sum FD, the entire principal earns interest for the full tenure. In an RD, only the first instalment gets the full term; the instalment you pay in the final month earns interest for barely a quarter. Because roughly half your RD money is deposited in the second half of the tenure, it simply does not have as long to grow.

What the numbers show

Take ₹10,000 a month at 7% for five years. Over the term you commit ₹6,00,000 either way. As an RD it matures to about ₹7.18 lakh. Invest that same ₹6,00,000 upfront in an FD and it grows to roughly ₹8.48 lakh — over ₹1.3 lakh more, purely because the money spent more time compounding. Widen the tenure or raise the rate and the gap widens further.

Why the RD still makes sense

None of this makes the RD a bad product — it answers a different question. Most people do not have a lump sum lying idle; they have a monthly income. An RD lets you build a guaranteed corpus out of that income while earning bank interest and keeping your capital safe. Comparing it to a lump-sum FD is only fair when you genuinely have the choice of investing everything today.

If you do have a windfall — a bonus, maturity proceeds, a gift — the disciplined move is to lock it into an FD immediately rather than parking it in a savings account and feeding an RD from it. You would effectively be lending the bank your own money at savings-account rates while it pays you FD rates on a slowly building balance.

A practical middle path

The strongest strategy is often to use both. Put any lump sum you already hold into an FD for maximum compounding, and run an RD from your monthly salary towards your next goal. That way the windfall works as hard as it can, and you keep building fresh savings without waiting to accumulate another lump sum. Whichever you choose, remember the maturity figures here are pre-tax: interest on both is taxed at your slab rate, so the real, post-tax gap is a little smaller than the headline numbers suggest.

Pros

Lump-sum FD: every rupee compounds for the full term, giving the highest guaranteed maturity for a given total.
Lump-sum FD: a single deposit is simple to manage and easy to pledge for a loan.
RD: lets you build the same corpus from monthly income without needing the money upfront.
RD: enforces a savings habit and can start with as little as ₹500 a month.
Both are capital-protected and DICGC-insured up to ₹5 lakh per bank.

Cons

RD ends with a smaller corpus than the equivalent FD because money arrives gradually.
Lump-sum FD needs the full amount available today, which many savers do not have.
Interest on both is fully taxable at your slab rate, trimming the post-tax gap.
Both lock you into the booked rate, so you miss out if market rates rise mid-term.

Tips

1If you have the windfall now, favour the lump-sum FD — the earlier compounding is hard to beat.
2No lump sum yet? An RD captures nearly the same rate while you accumulate from monthly income.
3Consider doing both: park the windfall in an FD and run an RD from salary for the next goal.
4Compare small finance banks and the post office, which often pay higher RD and FD rates.
5Submit Form 15G/15H if your income is below the taxable limit to stop unnecessary TDS.

Frequently asked questions

Everything you need to know about the RD vs Lumpsum FD Calculator.

Which gives higher returns, an RD or a lump-sum FD?

For the same total money and rate, a lump-sum FD wins. Its full principal earns interest from the first day, whereas RD instalments arrive gradually and later ones compound for only a short time. The comparison is only fair when you actually have the lump sum available today.

So why would anyone choose an RD?

Because most people do not have the full amount upfront. An RD lets you build the same corpus out of monthly income while still earning FD-like interest and full capital safety. It is a savings discipline first and an interest earner second.

Is this comparison the same as SIP vs lump sum in mutual funds?

The logic is similar — money invested earlier compounds longer — but the risk differs completely. RD and FD returns are fixed and guaranteed, while SIP and lump-sum mutual-fund returns depend on the market, where drip-feeding through a SIP also helps average out volatility.

Does the FD always beat the RD?

Whenever both use the same rate and the same total money, yes. The only way an RD can pull ahead is if it is booked at a meaningfully higher rate than the FD, which is uncommon for the same bank and tenure.

How is RD interest compounded?

Indian bank RDs compound quarterly. Each monthly instalment is treated like a mini fixed deposit earning interest for the quarters remaining until maturity, and the calculator sums them exactly as banks do.

Is the interest taxable on both?

Yes. Interest on both RDs and FDs is added to your income and taxed at your slab rate. Banks deduct 10% TDS once interest crosses ₹40,000 in a year (₹50,000 for senior citizens); submit Form 15G/15H if your income is below the taxable limit.

What if I invest the windfall in an FD and keep saving monthly too?

That is often the best of both worlds — lock the lump sum in an FD for maximum compounding and run an RD from your monthly income for future goals. This calculator isolates the two so you can see the pure difference.

Can I break either deposit early?

Both usually allow premature withdrawal with a penalty of about 0.5% to 1% and interest paid at the rate for the period actually held. An FD is simpler to exit; closing an RD early also forfeits some of the interest on recent instalments.

Which is better for a short-term goal?

If you already have the money, a lump-sum FD earns the most. If you are saving towards the goal from monthly income, an RD is the natural fit and keeps you on track with a fixed commitment.

Methodology & sources

How the RD vs Lumpsum FD Calculator is calculated, and where the underlying rules come from.

How we calculate it

Every result is produced by a single, shared and tested financial-formula library used across the whole site — so the maths is consistent from one calculator to the next. Figures are estimates based on the inputs you enter and standard assumptions (such as regular compounding and constant rates); real-world outcomes vary with taxes, fees and changing rates. All calculations run in your browser — nothing you type is stored or sent to a server.

Sources & references

Editorial policy & disclaimer. FinCalcHub provides free educational tools and estimates — not personalised financial, tax or investment advice. Verify important decisions with a qualified professional. Read our editorial approach, disclaimer and privacy policy.

Reviewed by Dhirendra Bisht, Founder & Lead Engineer, FinCalcHub — last reviewed 27 July 2026.

Guides & articles

Learn

What is a mutual fund? A beginner’s guide

Mutual funds explained in plain English — how pooling works, the main types, how you make money, and what the costs are.

6 min read

Blog

SIP vs FD vs RD: where should your monthly savings go?

Three popular ways to save every month — mutual fund SIPs, fixed deposits and recurring deposits. How they differ on returns, risk, tax and liquidity.

7 min read

Guides