Investment: Where to invest before Diwali? FD or RD, which is the best investment option for making money?

People often feel the urge to invest during Diwali. This is why they also look for safe options, such as fixed deposits (FDs) and recurring deposits (RDs). Both have been considered the best investment options for years, and both are available at banks and post offices, offering fixed interest rates with low risk. But the question arises: which is better for investing before Diwali? FDs are for lump sum investments, while RDs are for monthly savings. In 2025, FD interest rates range from approximately 7.5% to 8.75%, while RDs offer a monthly interest rate of approximately 6.7%. So, let's learn in simple Hindi what FDs and RDs are, their interest rates, advantages and disadvantages, what to check before investing, and which one to choose. This information will strengthen your savings.

FDs and RDs: What are they?

First, it's important to understand what FDs and RDs are.

FD (Fixed Deposit):
In this, you deposit a lump sum of money in the bank for a fixed period. You earn a pre-determined interest rate. Upon completion of the term, you receive both the principal and the interest. Banks have their own interest rates.

RD (Recurring Deposit):
In this, you deposit a fixed amount in the bank every month. This is also for a fixed tenure and earns interest. This is good for those who want to save a small amount every month.

So, which is the 'best money-making' option?
Now the question arises: where will you get the 'biggest' benefit? The answer depends on your financial situation and goals.

If you have a lump sum:
If you currently have a large sum of money, such as a bonus or a lump sum, an FD may be a better option for you.

Why? Any large sum you deposit in an FD starts earning interest from the day it is deposited.

Advantage: By investing in a long-term FD, you can take advantage of compounding, which helps your money grow faster. Senior citizens often earn slightly higher interest rates.

Current Trends: Many banks are offering impressive interest rates on FDs, especially for short-term deposits. You can check the latest rates on your bank's website or app.

If you want to save a small amount every month:
If you are salaried and want to save a small amount from your salary every month, an RD is the best option for you.

Why? An RD instills the habit of saving. You can start with a small amount, such as ₹500 or ₹1000 per month.

Advantage: This is a great way to save money for a major expense until Diwali or next year. RD interest rates are also generally around those of FDs.

An example: Suppose you open an RD of Rs 5,000 every month for 1 year. By the end of the year, you will have accumulated a substantial amount, which will also earn you additional interest.

Some tips to get the most out of it:

Compare interest rates: Compare FD and RD rates from different banks and NBFCs (non-banking financial companies). Invest where the interest rate is higher.

Choose the tenure wisely: Choose the term that suits your needs. Some banks offer better interest rates for shorter tenures, while others offer longer tenures.

Senior citizen benefits: If you have a senior citizen in your family, open an FD in their name, as they can earn up to 0.50% extra interest.

The magic of compounding: Investing for the long term gives you the benefits of compounding interest, which helps your money grow faster.

Premature Withdrawal: Some banks charge a penalty for prematurely breaking an FD/RD. Be sure to read the terms and conditions before investing.

Where will you get the biggest returns? At a Glance
FD:
If you have a large lump sum and want to invest it immediately.
RD:
If you want to build a substantial corpus by saving small amounts every month.
This Diwali, invest wisely and increase your wealth! Whether it's an FD or an RD, both are safe and reliable options that can provide you with good returns on your savings. Just make the right choice based on your needs and financial goals. (Note: This article is for informational purposes only and should not be construed as investment advice. It's recommended to consult a financial advisor before making your investment decisions.)

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.