How To Get the Best Out of Your RD Account: If you want the benefit of good returns on your savings without investing a huge amount in one go, then Recurring Deposit (RD) can prove to be a better option for you. This scheme is a form of term deposit. Recurring deposit requires regular investment. The customer gets good returns on RD without any risk. Here are the ways to get more benefits on Recurring Deposits.
Select a reliable bank offering higher interest rates
As soon as the customer subscribes to this scheme, he has to agree to deposit a fixed amount monthly. The amount the customer agrees to deposit in the RD account, the same amount is deducted from his savings account every month. The amount deducted from the savings account is credited to your RD account. It becomes more important to choose a bank that provides hassle-free services on the RD scheme. Different banks offer different offers on recurring deposits. Before subscribing to the scheme, see which bank is offering you more interest. At present, the benefit of interest is available on RD between 5.5 percent to 7.5 percent.
Choose RD tenure according to financial goal
Bank's recurring deposits are usually of 6 months or 12 months duration. If the investor wishes, he can extend the tenure of this scheme up to 10 years. In such a situation, the customer should choose the tenure for the RD scheme according to his financial target. For example, if you need to deposit your child's education fee in 12 months, then you can select the RD scheme for 12 months.
Choose Monthly Deduction Carefully
Before taking the RD scheme, the customer should keep in mind that every month a certain amount will be deducted from their savings account as a regular deduction. In such a situation, according to your capacity, choose the right amount to deposit Mathli in the RD scheme. Choosing the wrong amount can increase the financial burden on you.
Adhil Shetty, CEO of BankBazaar.com, explains that customers get guaranteed returns on recurring deposits. Investing in an RD scheme with a tenure of one to three years can prove to be better. The return on RD can be equal to the return on a Fixed Deposit or FD. But both RD and FD are different. Actually in the case of RD, one does not have to invest together.
Avoid premature withdrawal of the RD scheme
If there is no emergency-like situation, avoid withdrawing the amount deposited in the RD account before the prescribed tenure. A penalty may have to be paid for withdrawal before the RD scheme matures. Therefore, calculate the returns you will get on the amount deposited in the RD account and choose the tenure for investing them according to your financial goals.
