The RSS setting here > Settings > Reading creates an excerpt in the feed only, not in the posts themselves.
You need to insert “the more tag” into all your posts or switch to using a theme that automatically displays only excerpts on the front page like Inuit Types or Origin or Sight.
If you stick with the same theme then see here and note that when we insert “the more tag” into a post to split the content and display only an excerpt on the front page of the blog (or the page for posts) that split does not appear in preview mode. It does not appear until we publish. http://en.support.wordpress.com/splitting-content/more-tag/