Which gives Better Return: FD or Savings Bank Account?


Where to put your savings for the best returns is one of the essential choices you have to make when managing your money and making it work for you. The most popular options include savings bank accounts and fixed deposits (FDs). Both are ways to keep your money safe and expand it, but they offer different returns. 

You can make an informed choice that will significantly impact your financial well-being by reviewing the factors influencing the returns from these two financial products.

What are Fixed Deposits?

An FD is a financial investment provided by banks or other financial institutions where you can invest a lump sum amount. It often offers a higher rate of interest compared to other investment plans. You can use an FD calculator to determine what you can expect in the amount you wish to invest.

What is a Savings Bank Account?

A savings bank account is a common bank account that you can open at any bank. It is an account used to deposit money where the bank pays interest. You can use this money to plan your expenses and other financial goals anytime.

Why is a Fixed Deposit Better than a Savings Account?

Although both options offer interest to the consumers, there are reasons why choosing a fixed deposit can be a better option. One such is using an FD calculator online to know your returns before investing. Let’s look at the others below:

  • Interest Rate

Banks and other financial institutions offer a higher interest rate on Fixed deposits compared to the savings bank account. Therefore, you can expect better returns even if you invest for a short time. 

In addition, senior citizens are offered additional benefits on their FDs. You can always refer to an FD calculator to determine your returns.

  • Periodic Payout

Investing in FDs will allow you to receive periodic interest payout based on your preferences. It can be received monthly, quarterly, half-yearly, and annually if invested in non-cumulative FDs. 

Whereas investing in cumulative FDs, you can receive a higher interest payout. An FD calculator online is the best way to determine where you can get a better return.

  • Returns Guaranteed

One of the disadvantages of any investment is the returns that depend on market fluctuations. Here, FDs will give you more benefits than others. Irrespective of the market conditions, you will always receive guaranteed returns. 

When you see the market is down, you can use an FD calculator and calculate your returns. It will help you plan and manage your investments in a better manner.

  • Loan Availability

Human life is unpredictable, so you should invest in a financial plan that benefits you. With FD, you can get a loan in case of any emergency or long-term expense. 

In such cases, the principal amount of the FD serves as the collateral. Moreover, in most cases, the sanctioned loan amount is a percentage of the amount you deposited in your FD.

  • Great Saving Option

You can take money out of a savings account whenever you choose. In contrast, you can only withdraw money from an FD after the stipulated lock-in time. Thus, it is a significant saving option compared to the former. 

Moreover, you can also get additional perks, such as compoundable interest rates in FDs. You can use an FD calculator online to determine the amount of your returns.


The decision between savings bank accounts and fixed deposits (FDs) is essential to optimise the returns on your savings. FDs typically provide higher interest rates, but as a trade-off, your money is locked away for a set amount of time. 

Savings accounts, on the other hand, provide liquidity and ease of access but typically give lower rates.

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