Over the years, the perspective associated with investments has evolved. Earlier, your elders advocated investing to create a reliable contingency fund for emergencies. However, besides being an effective way of assuring financial security in uncertain times, investing now is considered to achieve various goals, efficient tax planning, and more.
Of all the investment options, a Recurring Deposit is preferred. It is an investment that works on the recurring investment strategy. It lets you earn modest interest earnings and build a significant financial corpus over time. Let us understand how an RD helps you convert your small steps into big wins:
Goal-oriented savings
Suppose you have a financial objective to achieve. You may want to buy the latest tech gadget or take your parents on their first-ever international trip. Initially, you consider the old-school means of saving a fixed amount of your monthly income in your Bank Account. No doubt this saving strategy works, but it takes a lot of time. Opening a Recurring Deposit Account is a smart and systematic way to achieve your goals.
It encourages you to save and grow your money systematically. Visit the nearest post office, bank, or financial institution, offline or online, to open an RD Account.
Customisable
You can choose your preferred investment amount and tenure with an RD Account. The minimum investment amount is different for every bank. Typically, it is as low as Rs 100 per month, letting you choose an investment amount within your affordability. Consider your investment goal to select a suitable investment amount. You can invest in RD for a minimum tenure of six months and a maximum of 10 years.
Considering your investment goal, affordability, and financial obligations helps you opt for an appropriate tenure. Typically, a longer tenure works in your favour as it lets you benefit from the power of compounding for a reasonable time span. The RD calculator is a fantastic online tool that determines a suitable investment amount and tenure.
It estimates the maturity value upon entering key variables within minutes. Visit the bank’s online banking platforms to access the RD calculator readily.
Flexible payment options
Banks extend flexible payment options, simplifying your RD journey. You can contribute daily, monthly, or quarterly to your RD. Generally, most investors prefer monthly contributions as it facilitates a decent frequency of compounding. You can make RD contributions conveniently using the Banking App. It also allows you to automate RD and other investment contributions. Consider automating the payments as this way you never miss a due date.
Insured
Your RD investment is generally insured by the Deposit Insurance and Credit Guarantee Corporation, better known as the DICGC, up to Rs. 5 lakh. This allows you to be assured when investing your hard-earned money. Read the associated terms before investing.