Recurring Deposits can help you save small amounts every month and gradually see it becoming a big corpus and earn fixed interest on it.
Step-wise-step wealth accumulation may seem like a challenging task in the beginning, but it is an effective strategy to build your corpus gradually especially when you do not have a large sum to invest at one go.
While considering many options for putting your money in risk-free instrument, the RD (Recurring Deposit) can be one the option you can choose if you are planning to start building a corpus with small savings. RD stands out as a secure and beneficial choice as it offers a unique set of advantages that make them a preferred avenue for investors seeking steady returns and minimal risk.
RD can help you save small amounts every month and gradually see it becoming a big corpus and earn fixed interest on it. Here is how RD can enhance your small corpus!
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Guaranteed Returns
One of the most compelling reasons to invest in RDs is the assurance of guaranteed returns. Unlike market-linked instruments, RDs provide fixed interest rates that remain constant throughout the investment tenure. This predictability is especially beneficial for risk-averse investors who prefer a steady income stream.
Flexibility
RDs offer a remarkable level of flexibility. Investors can choose their deposit amount and tenure according to their financial goals and constraints. This adaptability allows individuals to align their RD investments with short-term or long-term financial objectives, such as saving for a vacation, purchasing a vehicle, or even creating an emergency fund.
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Accessibility
RDs are easily accessible to a wide range of people, from the urban workforce to rural residents. Almost all banks and financial institutions across India offer RD schemes, making it convenient for investors to initiate an RD account with their preferred institution. This widespread availability ensures that RDs are a viable investment option for both urban and rural populations.
Minimal Initial Investment
Unlike many other investment avenues that demand a substantial initial sum, RDs are attractive due to their low entry barrier. Investors can begin an RD account with a relatively modest amount, thereby encouraging more individuals to embark on their investment journey.
Systematic Saving Habit
RDs cultivate a disciplined savings habit among investors. The regular monthly deposits required for an RD instil financial discipline and responsibility, aiding individuals in better managing their funds and avoiding impulsive spending. This systematic approach contributes to long-term financial stability.
Capital Protection
The capital protection offered by RDs is highly reassuring. Since RDs provide fixed returns, investors can rest assured that their principal amount remains intact, shielding them from market volatility and economic downturns.
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Hassle-Free Process
Investing in RDs is a hassle-free process. The application and documentation requirements are relatively straightforward, making it an attractive option for individuals who prefer a simple and uncomplicated investment experience.
Suitable for Beginners
RDs are an excellent choice for novice investors who are just starting their investment journey. The low risk, predictable returns, and ease of understanding make RDs an ideal stepping stone into the world of finance.
Diverse Maturity Options
RDs offer a range of maturity options, allowing investors to align their investments with specific financial goals. Whether one seeks a short-term or long-term payout, the diverse maturity choices offered by RDs cater to various investment horizons.
Investing in RDs presents a host of advantages that make them an attractive and viable option for a wide range of investors. With guaranteed returns, flexibility and accessibility of funds, RDs offer a secure avenue for individuals to grow their wealth and achieve their financial objectives.
The table below helps you compare the interest rates of more than 30 banks on RDs. You can compare and take decision based on your investment goals.
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RD Interest Rates offered by Banks (For 5-Year Tenure)
Note: Interest rate on Recurring Deposits (RD) for all listed (BSE) Public and Pvt Banks considered for data compilation. Data as on respective banks’ website on 08 Aug 2023. Interest rate (on RD for non-senior citizens) is considered for a 5-year tenure. Banks for which RD rates are not explicitly mentioned on their website are not included in the table. *Return is calculated with monthly compounding of interest.
