FD or Fixed deposit is a type of Time deposit in which you deposit fixed amount of money (minimum & maximum limit varies from banks to banks) for a fixed tenure and get interest+principal amount at end of tenure.Bank FDs comes with guaranteed returns and considered as safe option to put money which is needed in short term.

RD or Recurring deposit are similar to FDs except that in this you deposit a sum periodically mostly monthly and at end of tenure get your whole principal amount plus interest accumulated.

Interest rates offered varies from bank to bank and also depends on tenure FDs,RDs, currently banks offers interest rate in range of 6-7% for around 1 year tenure. Senior citizens get additional interest rate compared to other customers.

FD,RD account opening is very easy in current times, account can be opened with cash/cheque by visiting Bank or post office ,if you have already an account with bank or post office no any extra documentation required.Joint account is also permitted. Also you can open a FD,RD from NetBanking or Mobile banking of respective bank in very easy step.Amount after maturity directly gets credited or again reinvested depending upon instructions given to bank/post office while opening the FD,RD.One of added advantage of opening FD,RD online is that money gets credited in very short time when account matures or FD,RD is cancelled without need of going to bank/post office branch,this helps in time saving and money gets available instantly without any hassle.Pre-mature closer is permitted for FD,RD subjected to penalty levied by banks which are in range of 0.5-1% of the interest earned.Online premature closure is also available with many banks.

Taxation- Only 5 Years Tax saving FD provides taxation benifit in form of maximum deduction under 80C of 1.5lac, FDs of other tenure and RDs are taxable.Taxes should be paid on the interest earn according to the individual’s income-tax slab by adding the interest earned in head Income from other sources in ITR .There is also Tax deduction at Source /TDS if interest earn on FD,RD is more than 40000 Rs in a Financial Year.For senior citizens this limit is 50000 Rs per financial year 

Conclusion: FD is good option to park a lump sum amount required in short tenure for emergency purposes,for purchases planned in very near future say 1-2 years. One can earn interest rate more than saving bank interest rate which is currently around 3.5-4% for most of the banks.In case of immediate need FDs can be closed and money comes to your acocunt almost instantly if booked online.RD is preferred when one does not have a large sum to do a FD. Monthly saving or part of monthly saving which is to be used in near future can be put in RDs.