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SBI Accounts: Fixed Deposit (FD) Compared To Recurring Deposit (RD)

For SBI FD schemes, the tenure ranges between 7 days to 10 years.
For SBI FD schemes, the tenure ranges between 7 days to 10 years.

State Bank of India or SBI offers several types of deposit schemes under its personal finance portfolio. Fixed deposits (FDs) and recurring deposits (RDs), two such products offered by SBI earn higher interest rates in comparison to a savings bank accounts. In a SBI FD account, one can deposit a lump sum of money for a specific period and avail of features like guaranteed returns and choice of interest payout. In case of RDs, customers can deposit the sum every month and earn an interest income on the same, according to SBI's website- sbi.co.in.

Given below are the features of SBI fixed deposit (FD) and recurring deposit (RD):

Features SBI Fixed Deposit (FD) SBI Recurring Deposit (RD)
Tenure For SBI FD schemes, the tenure ranges between 7 days to 10 years. The minimum period of RDs is 12 months while the maximum is 120 months, according to SBI.
Investment Limit The minimum investment limit in case of SBI FD account is Rs 1,000. There is no maximum limit on the investment, according to SBI's website. Customers are required to make monthly deposits of a minimum of Rs 100 and in multiples of Rs 10 in a SBI recurring deposit account. There is no maximum limit on the deposits.
Interest rate SBI currently provides interest rates to the tune of 5.75-6.85 per cent to the general public on fixed deposit (FD) up to Rs 2 crore, as mentioned on its website. Interest rates offered on recurring deposits are the same as that on FD accounts for that particular period, according to SBI's website. 
Income Interest Interest earned on FD is taxable and SBI deduct TDS. SBI recurring deposit account is also subject to tax deducted at source (TDS).
Premature withdrawal  At the end of tenure, premature withdrawal is allowed with penalty. For fixed deposit (FD) up to Rs 5 lakh, the penalty for premature withdrawal is 0.50 per cent for all tenors. For fixed deposits above Rs 5 lakh but below Rs 1 crore, applicable penalty is 1 per cent for all tenors. Premature withdrawal is allowed on RDs and for this, rules for fixed deposits (FDs) or STDR (special term or fixed deposits) are applicable. For fixed deposits above Rs 5 lakh but below Rs 1 crore, applicable penalty is 1 per cent for all tenors, according to SBI's website.

(As mentioned on sbi.co.in)

SBI imposes the following penalty charges for non-deposit of monthly instalments in case of a RD account: for account of period five years and less - the bank charges Rs 1.50 per Rs. 100 per month and for account of period above five years- the lender charges Rs. 2 per Rs. 100 per month, according to SBI's website.