People always find some different ways to invest money for their need and future. Banks usually offer people to save their income in a regular way of fixed deposit amount into the regular deposit for there every month salary.
The habit of saving an amount of their individuals account for instill is the main motive of recurring deposit. Financial institutions and banks in our country offer recurring deposit in terms of different types.
Major benefits of investing in RD is some amount should be invested in banks or a financial institution for some period of time. Compare to other savings in finance the interest rate will be higher.
Features of recurring deposit:
Depositing minimum amount can differ from bank to bank. For six month minimum period deposit is started. For a small investment in a month we can get an interest is higher in recurring deposit.
Duration Period for recurring deposit:
In any bank customer can open there RD account with the minimum starting period is six months for their deposit period. RD period varies with bank to bank. The minimum period is specified as 24 hours in some banks.
Some of the major difference between RD and FD:
The duration period of investing money in FD with the minimum of 7 days to a maximum of 10 years. Where as for Rd the minimum period starts with 6 months with the maximum of 10 months.
Eligibility for opening account in both FD and RD is all Indians with their own residents and for Hindu families Nominations for both deposit is there should be only one nomination per deposit in a month. There should be a proof to claim a death of a deposit. The required nomination details are the name of depositor, age, address ect..
In recurring deposit 90% of the loan will be offered for the depositor whereas in fixed deposit 70 to 90 % will be offered.
Fixed Deposit:
If you have lump some amount them choose fixed deposit. The interest will be greater depends on the period you choose and the investment amount will be higher. The investor can enable their saving with high rate of investing amount to save in a bank. As per the depositor label the FD income tax will be changed. When comparing to RD FD will provide more money in return.
Before starting with investing money first know the pros and cons of both FD and RD and their benefits better go with a financial advisor and then choose the right option of investment.
I hope this article will provide some clear idea about both recurring deposit and fixed deposit.
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