Recurring Deposits are a known savings option in India, allowing you to systematically accumulate funds over a predetermined period. Several RDs are available in the country, each catering to different financial goals and preferences. Here are the different RDs offered by banks:
Regular Recurring Deposits
Regular RDs are the most common Recurring Deposit available in India. Here, you must deposit a fixed amount at fixed intervals, usually monthly, for a predetermined tenure. The interest rate offered on regular RDs may vary depending on the bank's policies, prevailing market conditions, and your selected tenure.
Senior Citizen Recurring Deposits
Senior Citizen RDs are specifically designed for individuals aged 60 years and above. These RDs typically offer higher interest rates than regular RDs to benefit senior citizens. The tenure and minimum deposit requirements may vary among banks, but senior citizens can enjoy attractive returns on their savings through this RD.
Flexible Recurring Deposits
Flexible RDs let you vary your monthly deposit amount within certain limits. Unlike regular RDs, where the instalment amount remains constant throughout the tenure, Flexible RDs will enable you to adjust your monthly contributions based on your financial circumstances. This type of RD is ideal for you if you expect fluctuations in income or expenses over time.
Variable Recurring Deposits
Variable RDs are like Flexible RDs but have the added feature of variable Recurring Deposit interest rates. In a variable RD, the interest rate may change periodically based on prevailing market conditions or the bank's policies. This means that the returns earned on the RD may fluctuate over time, offering the potential for higher returns if interest rates rise and posing a risk of lower returns if interest rates decrease.
Special Recurring Deposits
Some banks offer special-purpose RDs tailored to specific financial goals or requirements. For example, there may be RD schemes designed for education expenses, wedding expenses, or other major life events. These special-purpose RDs may offer unique features such as higher interest rates, flexible terms, or additional benefits to help you achieve your savings objectives.
Tax-Saver Recurring Deposits
Tax-Saver RDs help you save on income tax while building your savings through a Recurring Deposit Account. You can claim certain deductions under Section 80C of the Tax Act, 1961, for the invested amount in Tax-Saver RDs up to the specified limit.
Online Recurring Deposits
With the advancement of technology, several banks now offer the option to open and manage RD Accounts online through their Banking apps. Online RDs give you the convenience of access at any time and anywhere, letting you easily track your savings, make deposits, and manage your account.
Conclusion
Several RDs are available in India, each providing unique features and benefits to suit different financial needs and preferences, as mentioned.
