Investments are the ideal financial instruments to safeguard your funds. Several families consider it wise to start saving for any financial emergencies. Since the population worldwide is massive, financial institutes offer varied investment options with different schemes and tenures. They provide guaranteed returns and induce the habit of saving in several individuals. Be it teenagers, adults, or even senior citizens, and they can always approach their bank’s nearest branch and enroll for an account.
One of the low-risk investment tools is a recurring deposit. This one assures returns for a flexible to consumers, ensuring hassle-free investment. They can choose the amount to invest based on their capacity and see it multiply and receive interest throughout the deposit tenure. This investment tool is available at all banks to channelise monthly savings for short and long-term corpus creation ranging from six months to 10 years. You must choose the minimum monthly deposit amount over the term for assured wealth generation.
The RD facility is available at post offices as well. While the minimum deposit amount may vary from institutions, investors can start depositing an amount as low as INR 100 monthly according to their budget. However, opt for a scheme that allows a suitable investment amount based on your capacity and offers a maturity option ideal for your long-term and short-term goals.
The deposit offers many benefits. It helps in the accumulation of capital to meet financial goals and is a smart investment option. It also enables you to earn a fixed interest on the amount invested at frequent intervals until maturity. The following are the features it offers:
- Minimum investment: The minimum investment amount in this account varies between financial institutes. It is safer to check the terms and conditions of the concerned one to avoid any future troubles.
- Deposit term: The minimum deposit tenure of recurring deposit is six months and can exceed up to 10 years. There is a lot of flexibility when choosing the investment tenure according to financial status and priorities.
- Interest rate: Banks mention the rate of interest offered on these accounts on their portal usually. You will always earn a higher interest rate on these accounts as opposed to a regular savings account. The interest rate offered is like that of fixed deposit accounts. However, the periodic investment instead of the lump sum amount makes it suitable to create a corpus through monthly savings.
- Withdrawal procedure: While applying for RD, you must remember that you can withdraw the amount only after the account reaches maturity. Those who try to withdraw it before the maturity period must pay premature penalty charges.