1. Best For Planning Short-Term Goals
Recurring deposits are entirely risk-free and provide assured profits. Given this nature of RD, users who plan on achieving short-term objectives in a time frame of 1 to 3 years opt to participate in recurring deposits. In fact, a recurring deposit may release you from just the right amount of short-term financial burden. They could be:
a) Funding your wedding expenses
b) Annual education fee for your children
c) Renovation costs
d) Higher education costs
e) Buying or upgrading your phone
2. Can Start With Any Possible Amount
With an RD account, even those with modest incomes can accumulate savings because the minimum balance starts at about Rs. 500 and fluctuates depending on the bank or organisation. As a result, you can start with a budget that suits you and avoid making sacrifices when it comes to your everyday costs. It comes with guaranteed returns. And the best part is, the interest rate for a recurring deposit is also locked, protecting the individual against changes in interest rates.
3. Facility To Open An Account Online
Investing has just gotten simpler with almost all well-known banks now providing online recurring deposit services. The individual can update information, view deposit details, dismiss the RD account, examine transactions, start another RD, make deposits, and do a lot more online. Besides, it is simple to do and allows you to earn money without ever having to step out of your home.
4. Interesting Interest Rates
Interest rates on recurring deposits are based on deposit size and tenure. The interest rate on recurring deposits is typically quite comparable to that of fixed deposits. Essentially, the rate of interest for RD differs based on the bank and the consumer’s choice of plan. Additionally, a lot of banks also give senior citizens higher interest rates. An ideal way to figure this out would be to use an RD calculator to check how much interest one may earn for that specific duration, interest rate, and deposit amount.
5. Possibility To Save More Through Installments
When people receive substantial amounts of money like annual bonuses, most of them opt for an FD. However, if your salary and monthly spending habits leave you with less money at month’s end, you can set up a recurring deposit account to make use of the excess cash lying in your bank. By doing this, you can save modest amounts that add up to a huge number over time, and the money you would have otherwise left untouched in your bank account would earn a greater interest rate.