When it comes to investments, the majority of Indians prefer risk-free products that offer steady returns, irrespective of market conditions. To meet the investment objective of conservative investors, banks offer two unique investment products – fixed deposits (FD) and recurring deposits (RD). 

Both FDs and RDs are the two most popular investment choices in India. One of the biggest advantages of these products is that it’s risk-free. The returns are pre-determined and are not based on market fluctuations. If you’re looking for a long-term investment product that offers steady returns, then FDs and RDs are the right choices for you. 

All major banks and financial institutions offer fixed deposits and recurring deposits to their customers. In both FD and RD, an investor invests a particular amount of money for a predetermined tenure. At the end of the investment period, the investor receives the amount invested along with interest earned on it. 

Apart from these two investment products, ICICI bank offers another similar recurring deposit – the iWish. Here, in this guide, we do a side-by-side comparison of these three popular investment products – fixed deposits vs. recurring deposits vs. iWish flexible recurring deposit, helping you choose the right product that works for your financial objectives. 

What is a fixed deposit? 

As the name suggests, a fixed deposit is an investment product where the investor deposits a sum of money for a particular tenure. The sum deposited and the interest rates are fixed for the entire tenure. 

The maximum and minimum tenure depend on the bank where you’re opening the FD. Generally, the tenure can range from 7 days to 10 years. The interest earned by the sum invested (the principal) is credited to your bank account – monthly, quarterly, annually, or reinvested along with the principal. 

Benefits of Fixed Deposits

  • Risk-free investments, the interest, and principal are free from market conditions 
  • Inculcates the habit of saving 
  • Flexible tenures – choose a tenure from 7 days to 10 years depending on your investment goals 
  • Earn a higher rate of interest compared to regular savings bank accounts 
  • Liquidity – Through FDs incur premature withdrawal penalty, you can convert it easily into cash for emergency requirements 

What is a recurring deposit? 

recurring deposit is similar to an FD. The primary difference is that you invest particular amounts at regular intervals. Most recurring deposit schemes require the investor to invest a fixed amount every month. The interest is calculated monthly and is usually reinvested along with the principal. 

At the time of maturity, you receive the entire amount invested along with interest earned for the complete tenure. Just like in an FD, the interest rate remains fixed for the entire tenure. 

Benefits of Recurring Deposits

  • High-interest rates

The interest rates earned are higher than the interests offered by regular savings bank accounts. 

  • No penalties for missing a month

Earlier, banks used to charge a penalty for customers when they missed a month’s payment. However, today, most banks do not charge penalties if the customer misses a month due to an emergency. 

  • Can be started with low amounts

You can start a recurring deposit with just Rs. 500 per month. 

  • Shorter tenures

Unlike other investment products like ULIPs that require you to stay invested for at least two years, with RDs, you can choose shorter tenures starting from just 6 months. 

  • Minimal documentation

Starting an RD is simple and you don’t have to provide extensive documentation. Some banks even allow you to start an RD online with just a few clicks on their mobile app. 

  • Gradually building the corpus fund

It helps investors build a large corpus by saving small amounts at a time. This is a huge benefit for investors who are unable to withdraw large amounts at a go to invest in an FD. 

Additional Reading: What is a Fixed Deposit and a Recurring Deposit?

What is the iWish flexible recurring deposit? 

The iWish flexible recurring deposit is a special type of RD offered by ICICI Bank to its savings bank customers. It’s similar to a recurring deposit, the only difference is that – instead of investing a fixed amount monthly, customers can invest any amount at any time during the tenure. 

The iWish flexible RD is available to all internet banking customers of ICICI without any extra charges. Customers can easily monitor their savings via the mobile app – set saving goals, see how much they have saved, add funds to the iWish account, open/close multiple iWish RDs, etc. 

Benefits of iWish Flexible Recurring Deposit

  • Save multiple amounts for varying goals like travel, education, home renovation, gifts, etc. 
  • No penalties for missing any months. 
  • Save as little or as big as you can, depending on the finances in your hand. 
  • Enjoy interest rates similar to FD/RD. 
  • Start with as little as Rs. 50. 
  • Get contributions from friends and family members to meet your goals (optional). 
  • Easy to open, monitor, and track using the iMobile app of ICICI bank. 

Why invest in a fixed/recurring/iWish flexible recurring deposit? 

One of the main reasons why investors opt for these three popular investment choices is that it’s risk-free and offers higher returns compared to a regular savings bank account. Instead of letting your money lie idle in your savings bank account, you can invest in an FD/RD/iWish flexible RD and earn higher returns. 

What are the common benefits of investment in FD, RD and iWish Flexible Recurring Deposits?

The other benefits common to these three investment products include:

  • Complete control over the tenure and the investment amount. 
  • You can use your FD/RD as collateral while applying for a credit card or loan from your bank. 
  • Easy to open and does not require any extensive documentation. Most banks allow you to open an FD/RD online with just a few clicks on the mobile app or website of the bank. 
  • You can open an FD in the name of your children, grandchildren, spouse, parents and other family members. It makes for an excellent gift on birthdays, anniversaries and other special occasions. 
  • You can operate an FD/RD jointly with your partner. 

What are the taxation rules of FD/RD/iWish Flexible RD?

The taxation rules are the same for all these three products. The interest earned from FD/RD/iWish Flexible RD is subject to income tax rules if it exceeds Rs. 10,000 in a financial year. The interest earned must be added to your regular income and the income tax is calculated based on your slab. 

Banks deduct TDS on FDs/RDs if the interest earned is more than Rs. 40,000 in a year. For senior citizens, the TDS limit is Rs. 50,000. Senior citizens can avoid TDS by submitting Form 15G/15G if the overall annual income is less than the taxable limit. 

What are the basic differences between FD vs. RD vs. iWish Flexible RD


Fixed Deposit

Recurring Deposit

iWish Flexible Recurring Deposit

Manner of investment

Single deposit

Invest a fixed amount every month

Invest any amount at any time


7 days to 10 years

6 months to 10 years

6 months to 10 years

Minimum deposit amount

Rs. 10,000 (however it varies from bank to bank)

Rs. 500 (however it varies from bank to bank)

Rs. 500 (however it varies from bank to bank)

Interest Rates

Interest ranges from 2.90% up to 7% approximately depending on the investment tenure (for actual interest rates get in touch with your bank)

Interest ranges from 2.50% to 8.50% approximately depending on the investment tenure (for actual interest rates get in touch with your bank)

Interest ranges from 2.50% to 8.50% approximately depending on the investment tenure (for actual interest rates get in touch with your bank)

Number of deposits every month

Not applicable, since you have to invest only once at the start of the tenure

Once per month

Any number of times every month

Penalty for missing deposits

Not applicable

Yes. It depends on the bank.

No penalties, you can skip deposits any time.

Premature withdrawal

Depends on whether the FD allows premature withdrawals or not

Yes, but penalties are charged.

Yes, but penalties are charged.

Tax benefits

Yes, if you open a tax-saving FD, which has a lock-in period of 5 years.

No, tax benefits are available.

No, tax benefits are available.

Where to open?

Available at all banks and most NBFCs

Available at all banks and most NBFCs

Only at ICICI Bank



One of the daunting questions for investors is what is to be chosen between FD, RD or iWish Flexible RD. All these three investment products offer varying benefits. It all depends on your investment goals, the amount you can invest and tenure. 

Choose FD: If you have a lump sum to invest and are looking for tax-saving benefits. 

Choose RD: If you want to stay committed to your saving goals by saving a fixed amount every month. 

Choose iWish Flexible RD: If you cannot commit to a fixed sum every month, and want to save more when you have higher earnings.

FAQs - Fixed Deposit Vs Recurring Deposit Vs iWish Flexible Recurring Deposit

1. What is the lock-in period for tax-saving fixed deposits?

The minimum lock-in period for tax-saving fixed deposits is 5 years. 

2. Do investors get higher interest on fixed deposits?

Yes. Fixed deposits pay higher deposits to investors than the recurring deposit of the bank.

3. Are there any penalties for missing any payments or installments of iWish Flexible Recurring Deposits?

No, investors do not have to pay any penalties if they miss any installments of iWish Flexible Recurring Deposits.