Recurring Deposit, in present days, is one of the most preferred investment schemes available in India. Investors looking for a more promising investment scheme with good returns choose recurring deposit because it is a very convenient financial product. Before discussing the benefits of owning a recurring deposit from an early age, it is necessary to get a hold upon what recurring deposit actually means.
A Recurring Deposit or RD as it is generally referred to is a unique term deposit offered by banks. It is an investment scheme which allows customers with the ability to make regular deposits and earn decent returns on investments. This basically consisting of regular deposits and an interest component, this investment scheme provides flexibility and ease of use to individuals. The account holders can choose to invest a particular amount each month, ensuring that they have sufficient income for an emergency and ultimately facilitates earning decent interest on the amount. Given the fact that fixed deposits are rigid making it unideal for short-term investments, a recurring deposit is an ideal investment or savings option.
Most of the banks in India offer a recurring deposit account, with the term typically ranging between 6 months and 10 years and provide the investors with an opportunity to choose a term as per their needs. Competition among different banks to attract new customers has ensured that interest rates are competitive, and thus helps an investor earn a good amount on maturity of the account. Once determined, the interest rate does not alter during the given tenure, with the Reserve Bank of India ensuring that strict guidelines are followed. On maturity, the individual will be paid a huge amount which includes the regular, periodic investments and the interest earned on them.
The benefits of owning a recurring deposit from an early age are as follows:-
• Useful for Planning Short Term Goals- Investing in a recurring deposit is completely free of any risks and guarantees good returns in comparison to mutual funds and stocks. Because of this nature of this termed deposit, investors contemplating on short-term goals in a time span of 1 to 3 years choose to involve in a recurring deposit. It helps to handle situations where huge expenses are involved.
• Recurring Deposit Interest Rates- Recurring Deposit interest rates depend on the tenure and deposit amount. Interest rates for RD vary from 7.25% to 9% depending on the bank and the plan chosen by the customer.
Hence opening a recurring deposit account at an early age provides more returns due to the longer tenure of investment. The high and guaranteed returns attract more customers nowadays to open such accounts. In addition to this, facilities of online recurring deposit schemes have made things much easier.
A Recurring Deposit or RD as it is generally referred to is a unique term deposit offered by banks. It is an investment scheme which allows customers with the ability to make regular deposits and earn decent returns on investments. This basically consisting of regular deposits and an interest component, this investment scheme provides flexibility and ease of use to individuals. The account holders can choose to invest a particular amount each month, ensuring that they have sufficient income for an emergency and ultimately facilitates earning decent interest on the amount. Given the fact that fixed deposits are rigid making it unideal for short-term investments, a recurring deposit is an ideal investment or savings option.
Most of the banks in India offer a recurring deposit account, with the term typically ranging between 6 months and 10 years and provide the investors with an opportunity to choose a term as per their needs. Competition among different banks to attract new customers has ensured that interest rates are competitive, and thus helps an investor earn a good amount on maturity of the account. Once determined, the interest rate does not alter during the given tenure, with the Reserve Bank of India ensuring that strict guidelines are followed. On maturity, the individual will be paid a huge amount which includes the regular, periodic investments and the interest earned on them.
The benefits of owning a recurring deposit from an early age are as follows:-
• Useful for Planning Short Term Goals- Investing in a recurring deposit is completely free of any risks and guarantees good returns in comparison to mutual funds and stocks. Because of this nature of this termed deposit, investors contemplating on short-term goals in a time span of 1 to 3 years choose to involve in a recurring deposit. It helps to handle situations where huge expenses are involved.
• Recurring Deposit Interest Rates- Recurring Deposit interest rates depend on the tenure and deposit amount. Interest rates for RD vary from 7.25% to 9% depending on the bank and the plan chosen by the customer.
Hence opening a recurring deposit account at an early age provides more returns due to the longer tenure of investment. The high and guaranteed returns attract more customers nowadays to open such accounts. In addition to this, facilities of online recurring deposit schemes have made things much easier.
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