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Benefits of Fixed Deposits (FDs) & Why Choose BLM? (Bharath Lajhna)

04

Dec

Recurring Deposit (RD) Tips & Advice and Why RD in BLM?

Recurring Deposit (RD) Tips & Advice and Why RD in BLM?

Are your long- and short-term goals getting delayed due to the lack of proper investment? Often it becomes difficult for individuals to plan investments. Recurring deposit or RD is the simplest investment tool with relatively low risks than others. It involves a fairly simple method of investment with scope for everyone. In this article, we will have an insight into the various aspects of the Recurring deposit. It will also include various tricks and tips on how to get the maximum return from investments.

A straight-forward to invest and earn profit

Of the various investment options available, it is the simplest one. RD accounts can be opened for a fixed tenure and amount. The account holder needs to deposit a fixed amount every month for which interest (pre-determined by the bank) is earned. It is pretty much similar to putting a certain amount into the piggy bank for a certain period. Which is also an effective way to accumulate money for a purpose. The only difference being no interest is earned.

Every individual stepping into the world of personal finance must begin Recurring Deposit which is simple and easy to understand. Initially, investors are not aware of the tricks of the money market. It is the best option to keep funds secured while earning a profit. RD also checks bad expenses and ensures that some part of income is invested in the future. It encourages good investment habits.

Recurring Deposits help achieve short term goals

Investing in mutual funds is often risky and is not suitable for short periods. These investments are inconsistent. Recurring Deposits are suitable for both long as well as short term goals. Recurring Deposits can be effective in achieving goals like

  • Child Education and Higher Education Expenses
  • Big family events and marriages
  • Vacations
  • Making a down payment for New Home

Often investors seem to concentrate more on their long-term goals which are only a handful. Short-term and ultra-short-term goals are also important. These mostly get delayed due to poor planning. Creating an RD account maintains a regular investment schedule to fulfill these goals. For a clear understanding consider a goal of ₹30000 which will need a tenure of 10 months RD for ₹3000.

Tenure of Recurring Deposit and Requirements of various financial-institutions

The period of RD varies from bank to bank. Centralized banks and PSUs' minimum limits are as low as ₹100. In the case of private organizations, it is ₹500-₹1000. The steps of opening an RD is also simple and takes just a few seconds to start.

Salient Features of Recurring Deposit
  • Recurring Deposit Tenure ranges between 6 months to 10 years.
  • RD schemes offer flexibility in increasing the deposit amount.
  • Loans can also be availed against Recurring Deposits. 80-90% of the RD value is given as a loan amount.
  • RD can be broken before the maturity date in such cases a small penalty is charged by the bank.
  • Interest in Recurring Deposit is compounded quarterly.
  • RD income is free from TDS. However, the income earned is fully taxable.
Why choose Recurring Deposit in BLM

BLM is known to offer attractive interest rates for their RD scheme. These schemes ensure customers get the most from their investment. The RD plans are cleverly designed to meet customer needs. Recurring deposits are free from risks of the money market and give assured returns. Customers willing to invest for 1-3 years find these schemes attractive. Features like online support, premature withdrawal, interest rates at par with FD makes it even more attractive for customers.

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