Important things to Know
about Fixed Deposit and Recurring Deposit
Are you
still worried which deposit is a better investment for you? If yes then we are
going to make you aware about the facts and details about both the deposit methods.
Deposit is a kind of investment you do for a certain period of time and it
involves interest. Before moving any further there is one thing you must know
and it is about the interest. No matter what deposit method you chose, you will
receive the return for sure.
Now let’s
know about these deposit systems:
FD or Fixed Deposit
FD or Fixed
Deposit allows the customer to deposit their money at a single time. Fixed
deposit method is best for the farmers, small traders and Businessmen as their
income is irregular and the amount is somewhat lump sum.
Example: Depositing fifty thousand Rupees at
once for the period of one year. This is known as fixed deposit investment.
As far as
the investment amount is concerned,
fixed deposit account opens at Rs 1000 and there is no maximum limit as such. But in case if you are dealing with more
than 5 crores then you are not going to receive desired interest rate.
Maturity amount and investment rate also plays an important role while
selecting deposit scheme. And the rate of interest is same for both Fixed
deposit scheme and Recurring deposit scheme. However,
Fixed
deposit gives more Maturity amount as
compared to Recurring deposit.
Apart from
these there are some other criteria that should be considered and are follows:
- · The tenure period for the FD is 7 days to 10 years.
- · If you go for pre-mature withdrawal and assume you have a FD of more than Rs 5 lakh then the pre mature withdrawal will be around 1% less interest rate
RD or Recurring Deposit
RD or Recurring
Deposit allows the customer to deposit their money or certain amount at regular
intervals. Recurring Deposit scheme is best for the regular income groups like
Office employees and workers.
Example: You need to invest a fixed amount at
every interval like you put 1000 Rs every month in your deposit account for a
period of 2 years. . This is known as Recurring
deposit investment.
As far as
the investment amount is concerned,
fixed deposit account opens at Rs 100 and there is no maximum limit as such.
Talking about
the Maturity amount and investment rate
basically, the rate of interest is same for both Fixed deposit scheme and
Recurring deposit scheme. However, Recurring deposit gives less Maturity amount as compared to fixed
deposit. And the reason is every time you deposit the amount there happens to
be a different tenure for that particular installment so the interest gets
lesser at every succeeding interval and resulting in less maturity rate.
Apart from
these there are some other criteria that should be considered and are follows:
- · The tenure period for the FD is 1 year to 10 years.
- · If you go for pre-mature withdrawal and assume you have a FD of more than Rs 5 lakh then the pre mature withdrawal will be around 1% less interest rate same as fixed deposit.
Both the
schemes work for different purposes. Like RD can better used for Children
Higher education and marriage. On the other
hand Fixed Deposit is useful for those with bigger amounts like traders. You
are the better person to judge which scheme suits your requirement.
1 comments:
Write commentsGood one! I am also planning to save some money and this seems to be a good idea. Also, I am thinking about lic jeevan anand returns as well. I want to secure my family’s future. Glad we have such plans for everybody because you never know what happens in life.
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