Recurring Deposits are a popular investment choice among everyone in India. This is because they are low-risk, offering modest yet assured returns. This investment strategy provides various advantages. There are numerous reasons to open an RD. This guide offers a better understanding.

About RDs

A Recurring Deposit lets you earn interest at a fixed rate on the sum you invest at predetermined intervals until the tenure of the deposit ends. Unlike an FD that lets you deposit and lock away a lumpsum amount in one go, an RD lets you deposit a particular sum regularly for a fixed term. At the end of the term, the entire amount you invest and the interest you earn on it is repaid by the bank.

Reasons to open an RD

The reasons that make an RD a must-have include the following:

·         Hassle-free opening

Today, you can easily open an RD Account online from anywhere and anytime using Online Banking platforms like a Banking app. The process is not only instant but also usually paperless.

·         Safe

When you open an RD, the amount you deposit remains safe with your chosen bank. The sum is also unaffected by market fluctuations. In addition, the amount of your deposit in your RD, along with the interest, is handed over to you when the tenure of your deposit ends.

·         Goal-based savings

The most important benefit of an RD is that it helps you with goal-based savings by making regular contributions. These contributions earn interest and help you tackle your short-term goals, like funding a wedding or vacation. To determine how much you need to set aside to fulfil the goal, you can easily use an RD Calculator. Such tools let you ascertain how much you will receive when your RD matures.

·         Enjoy flexible payments

When you opt for an RD, banks usually let you deposit money into your RD by making monthly, quarterly, or half-yearly contributions online. You can start your deposit with a modest amount. For example, your bank may allow you to begin your Recurring Deposit Account with just Rs. 100. This enables you to open one even when you have little funds.

·         Earn higher interest rates

RDs usually offer a higher interest rate than your regular Savings Account. If you are a senior citizen, you can enjoy a higher interest rate. This is usually 0.5% higher than that given to other individuals.

Conclusion

Based on the various reasons that make an RD a must-have, you can easily open this Term Deposit online. Just use the Online Banking channels to get started.