Investing indeed requires discipline and consistency. It is easy to lose track of our investment habits, especially during busy or stressful times. However, by setting up an automated investment mechanism, we can ensure that we keep our investing goals on track. Recurring deposits are an excellent option for those who want to keep up with their investment habit.
This is particularly true for risk-averse investors who are looking for a secure investment & savings scheme with promising returns. Recurring deposits are simple, straightforward financial products that offer a great way to invest small amounts regularly and build a corpus over time. With its ease of use and guaranteed returns, it’s no wonder why recurring deposits remain a popular investment choice in India. Let’s see the benefits of Recurring deposits!
If you’re interested in investing in an RD and want to calculate your potential savings, check out Freo’s RD calculator. Try it out today.
What are the Benefits of Recurring Deposits?
If you’re considering investing in recurring deposits but aren’t sure of the benefits, here’s a sneak peek of what you can expect. Recurring deposits come with several advantages that make them a popular investment option. By understanding these RD benefits, you can make an informed investment decision. So, without further ado, let’s take a look at the top benefits of recurring deposits.
Attractive Interest Rates
When it comes to recurring deposits, interest rates are often a deciding factor for investors. The good news is that the interest rates for RDs are quite similar to those of fixed deposits and depend on the deposit amount and tenure. However, it’s worth noting that interest rates may vary depending on the bank and the chosen plan.
For example, at Freo Save, we offer RDs with competitive interest rates starting as low as ₹ 1000, and no lock-in period. Our interest rates are calculated per annum and compounded quarterly, ensuring that your investment grows steadily over time. With these attractive rates, investing in recurring deposits at Freo Save can help you meet your financial goals while ensuring maximum returns on your investment.
Useful for Short-Term Goals
Investing in a recurring deposit is an excellent option for those seeking guaranteed returns and a risk-free investment experience. While investing in Mutual Funds and Stocks can offer higher returns in the long run, they may not be ideal for those with short-term investment goals. For those seeking to meet their short-term financial objectives, recurring deposits are a popular choice.
It’s a simple and straightforward financial product that provides guaranteed returns, making it an attractive investment option. Whether it’s paying for your child’s yearly education fees, furnishing or renovating your home, going on an overseas vacation, or managing marriage expenses, recurring deposits can help you tackle these short-term financial situations with ease.
Flexibility and Multiple Short Tenure Options
At Freo Save, we understand that different investors have different financial needs and capacities. That’s why we offer flexible options when it comes to opening a recurring deposit account. You can choose a short tenure that suits your financial needs and capacity, similar to selecting the minimum deposit amount. In fact, with Freo Save, you can open an RD account for as little as 12 months, making it a convenient and attractive option for those looking to invest for the short term.
Learn More about – Is Recurring Deposit Taxable?
Loans Against RDs
One of the significant benefits of investing in a recurring deposit is that it can serve as collateral for a loan or overdraft facility. This means that in case of a financial emergency, you can avail of a loan or overdraft against your RD account. What’s more, the interest rates for loans against RDs are often lower than other types of loans, making it an attractive option for those seeking funds at a lower interest rate.
Additionally, if you have an outstanding loan payment, the bank can adjust the payment against the funds available in your RD account. This ensures that you don’t miss any payments and helps you maintain a good credit score.
Gone are the days when investing in a recurring deposit meant visiting your bank branch and filling out paperwork. With the advent of technology, banks across India are now offering online RD features that make investing simpler and more convenient than ever before.
Now, you can deposit funds, close or open RD accounts, update your account details, view transactions and much more, all from the comfort of your home or office. With just a few clicks, you can set up an RD account and start earning guaranteed returns on your investment. Plus, online RD accounts also come with added security features that ensure your transactions and personal details remain safe and secure.
Ease of Investment
For salaried individuals, investing in a recurring deposit scheme can be an excellent option as it doesn’t require a large lump sum amount to get started, unlike Fixed Deposits. With RD investments, you can invest a predetermined amount of your income each month, making it easier to manage your finances and plan for the future.
Additionally, RDs can be a powerful tool for young people to develop a habit of saving and reducing unnecessary expenses. By setting aside a fixed sum every month, you can build a corpus over time that can be used to achieve your short-term and long-term financial goals.
Get on the path to financial security with Freo Savings RD and watch your savings grow with every deposit
Is it possible to save tax on regular deposits?
One can potentially save taxes on recurring deposits by depositing money into the account for a medium or long-term period.
Is it possible for senior citizens to receive extra benefits on their Recurring Deposits?
In India, senior citizens may be eligible for a higher interest rate on RDs at most banks.