Saving money is crucial for ensuring financial stability. It serves as a protective buffer for your future and provides essential support during unforeseen emergencies. Recognising the importance of saving, banks offer investment opportunities that assist you in accumulating wealth.
An excellent example of this is the Recurring Deposit Account. It is a Term Deposit that lets you make regular deposits and earn steady interest on the same. As a result, you can expand your savings effectively. Here are the key aspects of this offering:
- Investment approach
In this scheme, the depositor should invest the amount every month. This goes on for a predetermined period, that is, the tenure. You can choose from a host of tenures based on your preference.
- Returns
A Recurring Deposit allows the depositor to earn decent returns. Also, the investor should be persistent to experience substantial gains.
- Rate of interest
The interest rates on the scheme entirely depend on its type. For example, an RD for a non-resident Indian might have higher interest rates than the regular ones. Therefore, it is best to assess this factor beforehand.
- Market risks
This investment facility is not market-driven. As a result, it provides risk-free opportunities to new investors.
- Tenure
You can start the plan in the short, mid, or long term. But to be specific, the tenure ranges between six months to a year and beyond. Your banking partner’s policies dictate the standard duration. Check the same on the website or Banking app.
- Financial hygiene
RDs urge you to maintain financial discipline by mandating regular deposits. Besides, it does not follow a complicated structure. Such perks encourage you to continue investing without any hassle.
- Loan facility
Most banks offer Loan facilities with your RD Account. This implies that you can apply for a Loan against the amount in your account. However, it is best to cross-check this offering with your bank.
- Eligibility requirements
Besides having a Bank Account, you should abide by other guidelines. For instance, you should have a regular source of income. You need to also upload a valid proof of the same. Check the documents required to prove this with the bank.
- Suitability
In the investment realm, a short-term goal takes one to three years. Considering this, an RD is a viable option to accomplish such objectives. It can be used to save yearly expenses or build efficient wealth.
- Simple documentation
The documents required to start the scheme are not challenging. Any resident individual can open it with a linked Savings Account. Besides, the process is hassle-free and smooth, provided you choose a reliable banking partner.
- Promising interest rate
Many choose this investment facility primarily because of its attractive interest rate. It is relatively higher and can be easily calculated through an RD Calculator. It is a free tool that computes accurate interest values of your RD investment.
