Recurring deposits would be termed as a savings account for a customer. Before the emergence of SIP, the recurring deposit was termed an ideal option for investing assuring a regular sum of money. It is designed to save money over a period of time as RDs is an advanced version of a fixed deposit. This is because a recurringdeposit understands that all the money would not be saved in a single go. With the aid of a rd calculator, you can figure out the exact amount of money. So, it allows you to save bit by bit as lets us understand the advantages of a recurring deposit.
High-interest rate
The major benefit of a recurring deposit is a high-interest rate. Some of the banks are known to offer a high-interest rate on their recurring deposits and it turns out to be higher than a savings account. Take note of the fact that the interest rates are based on per annum. The pay-out is expected to be made at the time of maturity with quarterly compounding. Mostly they are available for senior and domestic citizens in most banks.
There is no penalty if you miss a month
Remember those days, for some unavoidable reason you had to miss out on a fixed deposit, and then you had to shell out a monetary fee. Customer-friendly banks ensure that there are no fees if you miss out on a deposit in a month. Even in the case of premature closure, there is no penalty that is levied.
Start with a low amount and go slow in the first few months
The thinking is wrong that you need to have a lot of money to start your recurring deposit. One of the main benefits of a recurring deposit is that you may start with a small amount of money. There is no higher limit when it comes to the setting up of an amount related to a recurring deposit.
When it comes to investment products, there is a time to be committed to a fixed deposit period. Normally it is a case of 12 to 24 months but in the case of a recurring deposit, the time frame is a lot less. There are some banks that allow you to save less for as low as 6 months.
Simple documentation
The documents that are necessary to open a recurring account are not that difficult to arrange. All resident individuals can open a recurring account with a linked savings account. The moment you open the savings accounts there is no further documentation is needed. This is one of the simplest ways to create funds and wealth can be developed with a degree of warranty
To conclude if you are looking for a recurring deposit then the best platform that you can choose is 5 paisa. They are in case helpful if you have a short-term goal to achieve. Another advantage of a recurring deposit is that you are able to save part by part.