Gender equality is of pressing importance nowadays, with the government taking measures to elevate the position of women at various levels. Women of all ages require financial goals and freedom at all walks of life. Banks, both public and private offer various investment options to women – some are more market-linked than others, which can be risky. However, in the much popular area of risk-free and guaranteed returns, Fixed Deposits(FDs) and Recurring Deposits(RDs) remain the easiest and safest investment option.
Why women choose FD and RD?
Higher rate of interest: Women qualify for a higher rate of interest in comparison with the general schemes available in the market. Some schemes can even offer FD interest upto 9% for women.
Minimum investment: Women can invest as less as Rs. 500 in an RD or FD scheme and go on scaling their investments based on their financial strength.
Tenure & Loans: Banks & NBFCs show a lot of flexibility in terms of tenure to women, and one can also take a loan against FD based on the amount invested.
Security: Both FDs and RDs are traditional methods of investing, which are also considered secure in comparison to other investment methods.
FD vs RD: Which is better?
The primary difference between a Fixed Deposit and Recurring Deposit is the access of your personal funds that you provide to your financial institution. Let’s assume that you want to invest Rs. 50,000 with 6.30% fixed deposit interest rate, you will get a certain amount after a specified period of 5 years. Alternatively, you may also want to invest in a recurring deposit at the same rate of interest of 6.30%, and you will receive a certain amount which is typically lesser than the amount gained through FD.
We can see the following tabulation to understand the difference between FD and RD:
| Tenure | Fixed Deposit Amount | Interest Earned on FD (6.3%) | FD Maturity Amount |
| 1 Year | 50,000 | 3,150.00 | 53,150.00 |
| 2 Year | 1,00,000 | 12,997.00 | 1,12,997.00 |
| 3 Year | 1,50,000 | 30,174.00 | 1,80,174.00 |
| 4 Year | 2,00,000 | 55,366.00 | 2,55,366.00 |
| 5 Year | 2,50,000 | 89,318.00 | 3,39,318.00 |
| Tenure | Recurring Deposit Amount | Interest Earned on RD (6.3%) | RD Maturity Amount |
| 1 Year | 4,000.00 | 1670 | 49,670.00 |
| 2 Year | 4,000.00 | 6,561.00 | 102,561.00 |
| 3 Year | 4,000.00 | 14,882.00 | 158,882.00 |
| 4 Year | 4,000.00 | 26,856.00 | 218,856.00 |
| 5 Year | 4,000.00 | 42,719.00 | 2,82,719.00 |
You can see the difference where you can note that returns are usually higher for a fixed deposit for a short term investment (1 year) as well as long term investment (5 years), in comparison with a recurring deposit. You can also use an RD or an FD calculator available online to see the rates yourself.
Conclusion
A fixed deposit comes in handy if you have a significant amount of money and wish to invest for a shorter or a longer period. However, a recurring deposit is helpful if you have a minimal amount of money and wish to scale your investments. There are various FD & RD schemes provided by various financial institutions which can be helpful for a women’s future.