To receive full value for your money, deposit it in the bank to get adequate returns. Banks provide different Term Deposits where you can safely park your money and get periodic returns on it. You increase the probability of earning better and fixed returns throughout the investment tenure. Fixed Deposits can serve as a saviour during financial emergencies.
The Fixed Deposit interest rates ensure that you can use the corpus for urgent funding. Let us understand them better.
Fixed Deposits
Under FDs, you park your money with the bank for a fixed tenure between seven days and 10 years. You get a fixed interest on it, usually higher than the Savings Account. The interest rate varies between 6% to 10% per annum and regularly gets credited to your account. You can withdraw money from the account monthly, quarterly, or yearly and earn interest on the account balance according to the prevailing FD rates.
If you want to break the deposit, pre-closure comes with some penalty. Overall, it is an excellent scheme for those wanting to invest in a lump sum and receive fixed returns.
Saving Deposits
If you are seeking withdrawal independence and deposit your money whenever you wish to, you can opt for a Savings Account. Though the interest is lower than FDs, they provide flexibility concerning cash deposits and withdrawals. There is no fixed amount to deposit in the bank every month. The amount may vary, and it is totally up to you how you operate your account.
Recurring Deposits
An RD Account requires you to deposit a specific amount in the bank every month. It is handy for those who do not have lump sum cash to invest but can deposit a fixed sum. The investment amount is low, like Rs. 100 per month. The maturity tenure ranges from six months to 10 years.
Interestingly, you can give a standing instruction from the Banking app to the bank to withdraw a fixed sum from your Saving Account on a particular date every month and credit it to the Recurring Account. Since these deposits do not involve market risks, your returns are guaranteed and stable. Open them anytime and decide the amount without sacrificing your immediate needs.
Other facilities
Senior citizens receive attractive rates up to 7.75% and calculate the returns using the RD interest calculator. RD scheme is best for those who are confident that they can part with and deposit a particular sum every month into the bank.
You should compare the current FD rates before opening them in any bank. Becoming financially responsible and accountable is necessary for everyone. Using a calculator makes the task easier, quicker, and smoother.
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