Recurring Deposits or RDs are a popular investment method, especially for the younger generation, when they want to learn about savings and investments from a young age. Since, it is offered by banks, it is fairly easy to start investing. However, it is necessary to understand some rules regarding this investment method before starting.
When opening a recurring deposit account, one needs to choose the amount to be deposited each month as well as the tenure, when then determines the interest rate.
How recurring deposits are an ideal investment option for salaried individuals
- Salaried individuals cannot invest or save a lump sum in one go, since they have to pay bills and manage expenses on a monthly basis. However, they can save a small amount each month. Since, the amount is fixed, they can adjust their budget and expenses to regularly save this money.
- Even if one has a very low salary, and has some savings left every month, they can start an RD immediately to at least create an emergency fund. With recurring deposits, the deposit amount can be fairly low, and the duration of the RD is flexible and can also kept low, so that they can have access to their funds when they want.
- It is a highly secure investment option unlike mutual funds or stocks and one does not lose any money, when investing through RDs.
To know more about the benefits RD offered to investors, get in touch with experts at Arthavidhi today.
