Facts & Benefits of Recurring Deposit
Recurring Deposit: A recurring deposit is a secured investment option suitable for you when you can’t save a lump sum as a single payment. A recurring deposit investment is suitable for working individuals who want to save a little each month to get a lump sum later. Recurring deposits are eligible when you know to split and analyse your goals into short, long and medium types.
A recurring deposit is a high-interest rate providing investment option. With this option, you will invest the same amount each month for a fixed tenure under a fixed interest rate. You can choose a shorter tenure when you have short term plans. But when you have long term goals, then choosing a higher tenure will be the best option.
So depending upon your needs and your goals, you can choose the tenure as the tenure changes the interest rate for the investment changes as well. Always check the financial provider well, understand them and then invest with them. When you do thorough research, you can find out the financial provider that offers an investment option with a higher and attractive interest rate with safety.
When it comes to recurring deposit schemes offered by a financial institution, the majority choose one of the most popular investment options. A salaried person, as well as people with less income prefer RDs as their investment tool. However, according to this scheme, an individual can earn a fixed amount of money every month for a predetermined period of time and earn interest on their investment. The principal amount along with interest is returned after the maturity of the RD.
Here are some of the facts and benefits of Recurring Deposits that you need to know:
The minimum investment amount which has to be deposited every month in an RD scheme is as low as Rs. 1000. It is a significant attraction for people with low income and salaried people.
You can easily invest as a part of your income regularly. It is highly beneficial in inculcating the habit of saving.
The payment to your RD account can be made directly from your Savings or Current Account.
When it comes to an RD Account, it can be linked to one’s Savings Account. However, it does not require any documentation work under these circumstances.
Unlike a Fixed Deposit scheme, where you can invest a lump sum amount at one time. A Recurring Deposit does not burden the investor in such a manner.
When you invest in mutual funds and stocks, they are subjected to market risks. However, in RD Schemes, the deposited amount is safe and secure. It will be returned along with interest at the end of the fixed tenure.