Recurring Deposit (RD) is a type of investment product offered by banks and financial institutions where customers can deposit a fixed amount of money at regular intervals, usually monthly, for a predetermined period of time. The interest rate on the RD is fixed at the time of opening the account and remains constant throughout the tenure. Here are some of the benefits of Recurring Deposit for customers
Easy and affordable: RD is an affordable investment option for customers as they can start with a minimum deposit amount. Customers can choose a monthly installment amount that suits their budget, making it easier for them to save regularly.
Fixed interest rate: The interest rate on the RD remains fixed throughout the tenure, providing customers with a guaranteed return on their investment. This helps customers to plan their finances better and gives them an idea of how much they will earn at maturity.
Disciplined savings: RD instills a sense of discipline in customers as they have to make regular deposits. This helps them to develop a savings habit and ensures that they are saving a fixed amount every month
Flexible tenure: RD provides customers with flexibility in choosing the tenure of their investment. They can choose a tenure that suits their financial goals and investment needs. This can range from a few months to several years
Loan facility: Many banks and financial institutions offer a loan facility against the RD account. Customers can avail of this facility in case of an emergency, without having to break the RD account.
No risk: Unlike mutual funds or stocks, RD carries no risk. The invested amount is secure and the interest earned is guaranteed
In conclusion, Recurring Deposit is a simple, affordable and flexible investment product that provides customers with a guaranteed return on their investment. It instills a sense of financial discipline and helps customers to save regularly towards their financial goals