RD Saving Scheme: Banks and post offices are considered the best options for safe investment. If you also want good returns on your savings without investing a lot of money at one go, then Recurring Deposit can be the right option for you. This scheme is a form of term deposit. Recurring Deposit requires regular investment. Customers get better returns on RD without any risk. Recurring deposits are different from normal bank deposits.
Many investors, who need to keep a small amount of money in the bank for a short period of time, make only recurring deposits. Recurring deposits are also secured like fixed deposits. In this, the investor has to deposit some amount every month for a fixed period. When the scheme matures, the investor gets his deposited money along with interest. Recurring deposits can also be made for shorter periods and the rate of interest on them is usually higher than the savings made.
There are many advantages of investing in RD.
In this, you can start with an investment of at least Rs 10 per month. But it depends on the bank. This amount may vary from bank to bank. Investing in RD is very flexible. You can get RD done from six months to 10 years as per your convenience.
The interest earned in this is almost equal to bank FD. Many banks allow you to withdraw money from RD before the maturity period, but for this you will have to pay some charges. Its biggest advantage is that you can also take loan from RD mortgage. This can be 80 to 90 percent of your deposit.
Try these methods for better returns
- Choose a reliable bank that offers high interest rates.
- Choose RD tenure as per financial goal.
- Choose the monthly deductible carefully.
- Avoid premature withdrawal from RD scheme.
FD or RD which option is best
RD is the best option for small savings. People who do not have a lump sum amount to invest. RD is a good option for them. If you want to choose either FD or RD, then check how much money you have to invest. If you have a large corpus for a fixed tenure, you can opt for FD. You can get more benefit from this. If you want to invest a fixed amount every month then RD is a good option for you.
