Question 1

Why does the highest rate finish last?

Accepted Answer

Because a Time Deposit pays its interest out annually rather than compounding it. Money that leaves the deposit stops earning inside it, so unless you have somewhere good to put those payments the higher rate never catches up. Set a reinvestment rate on this page and you can see exactly how good that somewhere would have to be.

Question 2

What is the ladder, and would I really do that?

Accepted Answer

It means opening a new fixed deposit each month with that month’s money, each one running to the end of the period. Plenty of people do exactly that, and it is the assumption with the fewest moving parts. If you would instead leave the money in a savings account and open one deposit a year, you would earn less than this page shows, because the savings account pays less in the meantime.

Question 3

Why is the Post Office RD sometimes missing?

Accepted Answer

Because it runs on a term the scheme fixes, and if you asked about a different number of years there is no such account to open. Rather than stretching it to fit, the page leaves it without figures and says why. A scheme term is not a preference.

Question 4

Why show everything after tax?

Accepted Answer

Because the person doing this is saving out of income, so the interest is taxable at their slab. A gross comparison flatters all four by the same amount and hides that the relief under 80TTA and 80TTB changes what a senior citizen keeps. If the interest matters enough to compare, the tax on it does too.

Question 5

Where do the rates come from?

Accepted Answer

The two post office rates come from the dated ruleset on this site and are notified every quarter, so they carry their source and the date it was read. The two bank rates are inputs, because they differ by bank and by tenure. The bank FD and RD comparison pages show what five banks actually publish.

Question 6

Is there a reason to choose a recurring deposit anyway?

Accepted Answer

Yes, and it is not in the arithmetic. A recurring deposit is one instruction that runs by itself, while a ladder is a decision every month and one you can quietly stop making. If the gap between them is small, which it often is, the one you will actually keep doing is worth more than the one that wins on paper.

Lump It or Run a Recurring Deposit?