You may hold numerous desires. You may work hard at your job to earn a decent income and try to save some part of it to fulfil your desires. While saving is a great way to fulfil your desires, doing so takes years. So, investments are better. It helps you build a significant financial corpus over time, which you can eventually use to fulfil your desires. While you may have different goals, you need to earn a limited monthly income.
Given this, you may wonder how you can invest. In that case, you can explore a Recurring Deposit. It provides thw freedom to choose an investment amount and tenure. This means you can build a corpus according to your monthly income in a preferred timeline. RDs are of different types. Let us understand the types of RDs, helping you opt for a suitable one for investment.
Regular Recurring Deposits
A regular RD is a deposit everyone can invest in, whether you are an individual, corporation, firm, sole proprietorship, commercial enterprise, or government institution. As mentioned, with an RD, you can choose the investment amount and tenure. Typically, decide on an investment amount and tenure that suits your financial capacity and aligns with your investment objectives. The RD calculator is an online tool that helps with the same.
The RD calculator requires you to enter key investment variables. Within minutes, it offers an estimate of the interest-earning and maturity value. You can access the RD calculator freely by logging on to any banking website.
Minor Recurring Deposits
You can open a Recurring Deposit in your minor's name. Such an account has unique features specially curated to assure maximum security and easy management for minors. Hence, it is known as a Minor RD Account. Your minor must submit identity proof to open an account. If your minor is under 10 years old, the account will be held under the supervision of a natural/ legal guardian.
The minor RD converts to a Regular RD once your child turns 18. Thereafter, regular account rules and regulations will apply to the account.
Senior Citizen Recurring Deposits
The Senior Citizen RD works much like a Regular RD. The only difference is that a higher interest rate applies. The RBI has made it mandatory for all banks to extend higher RD interest rates of Senior Citizen RD as it ensures substantial earnings in your hands. As a senior citizen, you can also claim a tax deduction on the RD interest taxation. This lets you enjoy your investment returns to the fullest without taxation eating into them.
You can open any of the mentioned Recurring Deposits at any preferred bank by following a simple procedure offline or online. Ideally, invest with the bank offering the highest RD interest rate, as it means good interest earnings for you.
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