RD Plays a Big Role in Saving and Investing for Beginners

I remember when I started working, my father advised me to save at least 10% of my income, at that time we do not have any good mutual funds or anything else. The only option was to save in the savings account or open a recurring deposit (RD) on the first day of the salary. For me, Recurring Deposit (RD) played a big role when I started my investing journey because it has given me the sense of saving at least some amount.

image.png
PC: Pixabay.com

The good thing about RD is that you can start it as low as Rs 100, I remember I have begun with rs 500 per month and then once I had a good amount I invested that in shares and other things. RD offers a fixed interest on the invested amount and thus when you do not have to pay any tax you get the full interest in your pocket. The main feature of it is that it inculcates a regular habit of saving and thus that people can use to save and invest more.

We can start it as small as Rs 100, for a minimum period of six months and can deposit up to 10 years. The rate of interest is similar to that of a Fixed Deposit, now the good thing about RD is that you invest that same amount every month and thus you get the money on the maturity, the amount invested and the interest amount.

Now people will ask if we have SIP in a mutual fund, crypto then why use Recurring Deposit. That's true, you can start the SIP in a mutual fund or crypto, but the thing is recurring deposit gives you a risk-free return. For example, I have to pay Rs 100K as my daughter's school fees, I cannot start the SIP because that can be risky so I will start with a Recurring deposit of Rs 8K per month and by the time I have to pay the school fees, I will have Rs 100K in my pocket so that I can comfortably pay the school fees. If we go with a mutual fund, there is a risk involved and thus for the short duration, we do not want to take that risk.

Posted Using LeoFinance Beta



0
0
0.000
3 comments
avatar

This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.

Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.

Please contribute to the community by upvoting this comment and posts made by @indiaunited.

0
0
0.000
avatar

Yes totally agree with you on that this is what I like about RD we don't have to look over it again and again. Aaj kina bada 😅.
That is i did the same some amount in RD , some in SIP for long term and few in crypto mostly in hive.
Great post bade bhai thanks for sharing.

0
0
0.000