A fixed deposit(FD) is a type of investment made, where a customer deposits a lump sum of money in a fixed deposit for a specific period of time which depends on the financier. And once it is deposited it starts earning an interest based on the duration that is set. Whereas in a recurring deposit(RD), a fixed amount will be deposited every month and interest will be earned at the rate applicable.

You will get the money that was deposited, along with the interest that was earned in that time period. The interest for banking products will differ with interest rate scenarios, but once you have made your investments it remains the same throughout the term. When you compare the final returns, you will earn more with fixed deposits. For example, assume that you have invested 12,000 in a fixed deposit at the start of the year and Rs. 1,000 per month in a recurring deposit for a year. These products will offer you an 8% interest. After a year, you will receive Rs. 12,995 through your fixed deposit and Rs. 12,533 after maturity. There is a difference of Rs. 462. So when you have a lump sum of money the better option to go for is fixed deposits, but if you only want to make investments in instalments, you can go for Recurring deposits.