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5 Benefits of Recurring Deposits We Mostly Overlook
Posted on Friday, April 16th, 2021 | By IndusInd Bank
There are a plethora of investment options in the market, with varying interest rates and features. If you’re looking for a low risk and easy investment avenue, a recurring deposit (RD) guarantees assured returns and other benefits.
A recurring deposit account allows you to deposit funds for a pre-decided period in a timely fashion, be it monthly, quarterly or annually. This is the perfect option if you are starting out and do not have a lump sum to invest. In such an account, the instalments are due at regular intervals. Here are some of the significant advantages of opening a recurring deposit in India.
Minimum Initial Deposit
Unlike a fixed deposit or savings account, you can open a recurring deposit with a balance as low as Rs. 500. This makes it highly accessible to all sets of citizens and encourages monthly investments that leave room for expenditure. You can invest in the entry-level balance of Rs.500 or go up to thousands; the choice is yours. Moreover, this timely investment also fosters fiscal discipline and makes you more responsible.
Smooth Entry and Exit Options
A recurring deposit has easy entry and exit options. This investment allows for premature closure of the account, but you may have to pay a small penalty fee as mandated by the bank. Besides, the easy eligibility and minimal documentation procedures make it easy for any individual to open this account. You have the freedom of deciding your tenure and instalment amount. At IndusInd Bank, you can get terms ranging from 12 months to 120 months.
Competitive Interest Rates
Opening a recurring deposit gives you an advantage as you can create a corpus for the future without sacrificing current spending. In addition to this, you can enjoy a competitive interest rate. Market forces decide the rate of interest and it is usually the same as a fixed deposit.
The added benefit here is that you can allocate a certain amount from your income on a monthly, quarterly or annual basis and get the same interest rates as a fixed deposit, without locking away a lump sum amount. You can also take a loan against this deposit.
Easy Fulfilment of Short-Term Goals
Often, we want to be financially prepared for occasions in the foreseeable future like weddings, admission into university or making a heavy-duty purchase such as a home or a car. In such a case, a RD is the best investment option. You can start investing early for an event say your child’s wedding, without engaging a considerable amount. Moreover, this makes the savings and expenditure manageable as a small amount is credit to your RD account at regular intervals.
Early Bird Investment for Minors
Parents or legal guardians can open an RD account for their children’s education and other expenses. By selecting the tenure, you can ensure that the deposit will mature when the child has to go for further education, get married, buy a home, etc. and start their investment journey early. The low minimum balance requirement also ensures that children can contribute to the savings from their pocket money or part-time earning.
Open a Recurring Deposit with IndusInd Bank
At IndusInd Bank, you can open a recurring deposit for an amount as low as Rs. 500 and enjoy competitive interest rates Our minimal documentation process requires some essential documents like identity proof and address proof. To open an RD online, click on the “Apply Now” button, enter your details and we will contact you for KYC procedure.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
