Invest in the best — FD, RD, or MIS ?

By August 6, 2019

Fixed Deposit, MIS(Monthly Investment Scheme), and Recurring Deposit are the most mainstream investment schemes in India. You can choose FD or RD, particularly if you are searching for an investment with no risk. One of the significant favorable circumstances of making an investment in these schemes is that returns are fixed over a predetermined timeframe without any risk.

Almost all banks and NBFCs offer fixed deposits, MIS, and recurring deposits. In these plans, you can contribute a particular sum, and on the sum contributed; you will get a fixed interest.


People who choose to put their funds into fixed deposits should pick a term between 7 days to 10 years and must store a sum of money once. The investor will be benefited with interest on the amount on a month to month or quarterly basis.


People who pick to put resources into recurring deposits should choose a time period, which typically runs from 1 year to 10 years relying upon your bank. In any case, they can store a fixed sum of money each month and can get the interest amount on a month to month basis.


In MIS, the investor is asked to initially pool money with his lender and then earn the returns which will be benefitted to him every month.  


Both Fixed deposits and recurring deposits:

Both fixed schemes for investment accessible with all the significant banks. On the sum contributed, banks will pay you a fixed interest over a predefined period. Accompany similar taxability. The interest got from these two deposit plans is added to your yearly income or salary. In both Fixed deposit and recurring deposit, banks deduct TDS (Tax Deducted at Source) if in a year your interest income is more than Rs 10000.No tax will be deducted if there should arise an occurrence of a Fixed deposit and recurring deposit if the total interest income is not as much as Rs 10000 every year.

Consistent with its name, monthly income scheme, or MIS: Highlights interest payable at the contracted rate each month, on the Fixed deposit which is acknowledged for any period from one year to ten years Interest is paid month to month at the discounted value. Interest is paid/credited to the Savings/Current/Cumulative record of the investor during the last week of every month. The deposits can be put for a half year to 120 months.

What Should You Choose?

People who don’t have the amount of cash required to put into a Fixed deposit yet can bear the cost of a little part of the investment from their salary each month can go for a recurring deposit rather than a Fixed deposit? A fixed deposit is a correct choice for you if you have a large amount of money saved to invest. Fixed deposit and recurring deposits are investments without risk while MIS has high risk. An investor should only go for MIS if he is willing to take high risks. The returns in MIS are also not sure. While FD and RD are safe investments, MIS is equally risky.

But to decide which one to opt for one must look into certain factors like the surety of earnings, risk calculations, cash earnings, payouts, etc.

Read more: Fixed Deposit Investment V/S Bonds Investment V/S Gold Investment

Tags: ,