Of the many financial products available in the investment market, an RD is one of the oldest, most popular, and time-tested investment options. It is a non-market-linked investment, which means it is free from capital market risk and fluctuations. Your money remains safe, and you get it as promised.
A Recurring Deposit is a savings-cum-investment account offered by banks to investors who want to keep their savings and see it grow simultaneously. It works on the simple principle of compounding with a fixed interest rate.
What are its features?
For instance, if you open an RD Account for two years, you must deposit money into it for 24 months. When the money gets deposited, it compounds the applicable interest rate over the years. Consider some other features offered as well:
Guaranteed returns
Because a Recurring Deposit Account is a non-market-linked investment, it provides the compounded returns promised to the investor at the start of the deposit’s tenure. This surety of getting a return on investment at the maturity of the RD investment plan is what makes this product a preferred investment option.
Low risk
RDs are safe because they do not link to the capital market. So, any fluctuations in the Equity, Debt, Hybrid, or Commodities Market do not affect the interest rates and accounts. The maturity amount earned is guaranteed.
Payment flexibility
You can deposit money in this account monthly instead of investing in a one-time lump sum. Recurring Deposits can accommodate a modest budget, and you can deposit as low as Rs. 100 or Rs. 1,000. This flexibility of periodic monthly payments makes Recurring Deposits more convenient. You can also invest in them through the Banking app.
Loan withdrawal
If you are facing a shortage of income to pay for an immediate emergency or requirement, you can rely on RDs to borrow a Loan. After applying, you can take up to 80% to 90% of the deposit value as a Loan. The bank will treat the maturity amount payable at the end of the tenure as collateral and issue the amount.
Goal-oriented savings
A Recurring and Fixed Deposit allows you to save and grow your wealth in a goal-oriented manner. You can fulfil almost any goal with the money earned in this deposit and align it as per your timeline. Whether you want to buy a house, a car or pay for children’s marriage or education, Deposit Accounts are customisable to realise any vision.
How to open it?
You need not visit the bank branch, fill out a form, or deposit a cheque to set it up. Now, you can avoid all these hassles by opening a Recurring Deposit online. Download the app, click on the Open RD Account option, enter the investment tenure, amount, and linked Bank Account details, check the applicable interest rate and other conditions, and receive a confirmation message from the bank.
