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  • Advantages of Investing in Recurring Deposits

    Recurring Deposit is one of the most preferred investment schemes available in India. Risk averse investors looking for a promising investment scheme with good returns choose Recurring Deposit because it is simple and is a straightforward financial product. Read on to find more about the advantages of investing in a Recurring Deposit scheme in India.

    What is a Recurring Deposit and How Does It Work?

    In a recurring deposit scheme, the investor deposits a set amount every month over a predefined tenure which generally varies between one year to five years. The recurring deposit scheme has one major differentiating point when compared to fixed deposits - in a fixed deposit scheme, the investor has to deposit a lump sum once and leave it untouched for a period of time. So, people who do not have a lump sum or people who are looking to invest a set amount every month usually prefer Recurring Deposits. The principal amount deposited is returned at the end of tenure along with the interest. Normally, the interest is calculated on a quarterly compounding basis for recurring deposits.

    How to Open a Recurring Deposit?

    All major private and public banks in India offer Recurring Deposit products for their customers. Also, India Post offers a very popular recurring deposit scheme in the name of Post office Recurring Deposit scheme. Follow the steps given below to open a recurring deposit account.

    • If you already have an account with the bank that you wish to open a Recurring Deposit with, you can contact the nearest bank branch or the bank’s customer service cell to open a recurring deposit account.
    • If you wish to open a recurring deposit account in a bank with you do not have an account with, you will have to contact the nearest branch and submit an application form. Also, you will have to submit basic KYC documents to open an account.
    • At the time of opening a recurring deposit account, the tenure as well as the monthly due amount (deposit amount) should be decided. Monthly payments for Recurring Deposits can be done online using ECS, online banking or fund transfer.

    Advantages of Recurring Deposits

    With banks offering an attractive interest rate for Recurring Deposit products, customers can gain the maximum out of their investments. Here are some of the advantages that come with Recurring Deposits.

    • Useful for Planning Short Term Goals

      Investing in a Recurring Deposit is completely risk free and gives guaranteed returns. Investing in Mutual Funds and Stocks might not be a safe option if you have short term investment goals. Because of this nature of RD, investors contemplating on short term goals in a time span of 1 to 3 years choose to involve in Recurring Deposit. Consider the situations given below, Recurring Deposit might just be the right financial product if you are planning to tackle short term situations that require financial assistance.

      • Yearly education fee for your kids
      • If you are employed, higher education costs
      • If you own a home, furnishing and renovation costs
      • Overseas vacation
      • Managing marriage expenses
    • Online Recurring Deposit Features

      With almost all popular banks offering online Recurring Deposit features, investing has just become easier. The customer can deposit money in Recurring Deposit account, close the RD account, open another RD, update information, view transactions, deposit details and do much more online. Think about making an investment and earning interest without even having to leave your home - investing in a Recurring Deposit is as easy as this.

    • Recurring Deposit Interest Rates

      Recurring Deposit interest rates depend on the tenure and deposit amount. In most cases, the Recurring Deposit interest rate is very similar to that of fixed deposits. Interest rates for RD vary from 7.25% to 9% depending on the bank and the plan chosen by the customer. Also, many banks offer higher interest rates for senior citizens. You can also use a RD calculator to find how much interest you will accumulate for the deposit amount, interest rate and tenure.

    • Ease of Investment

      In a Recurring Deposit scheme, the investor has to deposit a fixed sum every month which will build up a savings discipline. For salaried customers, it will be easier to set aside a particular amount every month as savings and for this, Recurring Deposit is the best option. Also, RD schemes come with guaranteed returns and the rate of interest for RD is locked in which will protect the investor from interest rate swings.

    • Flexible Recurring Deposit

      Some banks offer flexible Recurring Deposit schemes where the investor will not be penalized if the amount is not deposited during a particular month. Also, in a flexible RD scheme, you will be able to withdraw the amount from your RD account anytime you want.

    Disadvantages of Recurring Deposits

    A financial product comes with benefits, but will always have some flaws. Let us take a look at certain things that may be slightly discouraging, when you are taking recurring deposit as your saving instrument:

    1. Liquidity: When you deposit the money in an RD, you will never have the privilege to withdraw any part of the money until the term of the deposit is over. Hence, if you are looking for an easy liquidity instrument, recurring deposits are an absolute bad idea. On the other hand, if you want to discipline your savings this disadvantage may work to your benefit.
    2. Rate of Interest: The interest rate that you earn on recurring deposit is much lower that regular fixed deposit schemes, since your deposits are being made in small installments and not as a whole chunk.
    3. Stringent Monthly Installments: It is not possible in the case of recurring deposits to be able to change your deposit amount, regardless of your financial situation at the moment. With a fixed amount for investment each month, someone with chances of extra or less funds for the deposit should be discouraged from opting for this product.
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    Customer Reviews

  • Page 1 of 50 1 2 3 4 5
    • HSBC Bank Credit Card
      "Good"
      HSBC BANK
      0.5 4.0/5 "Great!"
      HSBC credit card is my least choice to prefer, which does not mean ,its not working good. I would like to say that the credit limit value is good one for me and I have stopped to use it for some long time. Offers are good one with them till now.
      Was this review helpful? 1
      , pune
      Reviewed on Jun 22, 2017
    • ICICI Bank Credit Card
      "Excellent"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      My best credit card is the ICICI bank one because I can merge everything with this credit card . I had been with them for some long time. Customer service is good, while it comes to matter of on time settlement. I have never faced the penalty charges till now , also the offers are up to the mark .
      Was this review helpful? 0
      , pune
      Reviewed on Jun 22, 2017
    • HDFC Life Life Insurance
      "Best"
      HDFC LIFE
      0.5 4.0/5 "Great!"
      I do have term life insurance policy with the HDFC life insurance company. Everything was done by online service and the coverage value was around 50 lakh Rupees and the premium is around 14000 Rupees. Regular alerts are fine one with them, also they are flexible with the customer.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 22, 2017
    • LIC Life Insurance
      "Good"
      LIFE INSURANCE CORPORATION OF INDIA
      0.5 5.0/5 "Blown Away!"
      I do have life insurance policy with the LIC of India and I want to say that they are pioneer of the insurance company. Customer service and other things are really good. Response is very good with the LIC of India and there are no suggestion to them.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 22, 2017
    • ICICI Bank Personal Loan
      "Its GOOD"
      ICICI BANK
      0.5 3.0/5 "Satisfactory"
      I have cancelled ICICI personal loan because I was holding my salary account with Standard Chartered bank. Hence I thought to process the loan with existing bank to make process easier. Therefore I didn't avail the personal loan from ICICI but it is good.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 22, 2017
    • Bank Bazaar Customer Support
      "Excellent"
      STANDARD CHARTERED BANK
      0.5 5.0/5 "Blown Away!"
      Bankbazaaar.com is really good one and am using it for the second time, also I took some insurance policies with them before. Online portal of the Bankbazaar.com is easy to access, also comparison can be done on immediate basis.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 22, 2017
    • Standard Chartered Bank Personal Loan
      "Excellent"
      STANDARD CHARTERED BANK
      0.5 5.0/5 "Blown Away!"
      Experience was good with the Standard chartered bank to get the personal loan. Service aspects are really good. The loan amount got disbursed to my account within a week of time. Services are really fine one for me but the branches are lesser one with them. Rate of interest was not at all the constraint, also I can say it was good one.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 22, 2017
    • ICICI Bank Saving Account
      "Excellent services"
      ICICI BANK
      0.5 4.5/5 "Excellent!"
      I bank with ICICI Bank for a savings account and it has been a good experience till date. The customer services are good and the online banking is the best. I visit the bank very rarely as I do all my banking online and it is more convenient as well.
      Was this review helpful? 0
      , navi mumbai
      Reviewed on Jun 22, 2017
    • Bank Bazaar Customer Support
      "Immediate response"
      HDFC LIMITED
      0.5 4.5/5 "Excellent!"
      Bankbazaar.com have contacted me within five to ten minutes of time, also the response is very prompt. They have forwarded the information to the bankers on immediate basis. Customer service is good and the website is easy to access.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 22, 2017
    • HDFC Bank Saving Account
      "Better Service"
      HDFC BANK
      0.5 4.0/5 "Great!"
      For the past two years, I am banking with HDFC. I maintain savings account with them. The customer service is pretty good and I am quite happy with the bank service. In all these years I never faced any kind of issues or challenges with the bank.
      Was this review helpful? 1
      , agra
      Reviewed on Jun 22, 2017
    • HDFC Limited Home Loan
      "Better "
      HDFC LIMITED
      0.5 4.0/5 "Great!"
      HDFC limited have contacted me after sometime from the time of inquiry for the home loan. Rate of interest was around 8.5%, which was bit huge one for me , also I am okay with that. Customer service and other things were good only.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 22, 2017
    • Bank Bazaar Customer Support
      "Overall good"
      STANDARD CHARTERED BANK
      0.5 4.0/5 "Great!"
      The overall experience was nice at Bankbazaar. I received a immediate response and the process was quick as well. I did not get the loan account number from the bank and I called this portal but at that point of time they could not help me with the bank contact. They need to have a proper tab on the aggregation and all the details of the banks should be made more transparent.
      Was this review helpful? 0
      , navi mumbai
      Reviewed on Jun 22, 2017
    • Future Generali Life Life Insurance
      "Good insurance company"
      FUTURE GENERALI LIFE INSURANCE
      0.5 3.5/5 "Pretty good"
      I do have life insurance policy with the Future generali life insurance company. Coverage value is good one like its around 50 lakh Rupees and the premium is not at all the comparable one. Claim ratio is the way to choose the policy rather than he premium like Future generali do have a good claims ratio.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 22, 2017
    • Bank Bazaar Customer Support
      "Centralized online portal to make the comparison"
      HDFC LIMITED
      0.5 3.5/5 "Pretty good"
      Bankbazaar.com is good thing like I can make the comparison of every bankers relating to the financial requirements. I would like to say that they could make the information to be get forwarded to unique bank only, which customer is really opted. Online portal of the Bankbazaar.com is an average one.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 22, 2017
    • HDFC Limited Home Loan
      "Service to be get improved"
      HDFC LIMITED
      0.5 1.0/5 "Really Bad"
      Nobody have contacted me from the HDFC limited for the home loan, which I have inquired. Rate of interest was around 8.6%, also I am okay with them. In future, I would like to go ahead with them in future and I request them to contact the customer as soon as possible.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 22, 2017
    • ICICI Lombard Health Insurance
      "Satisfactory "
      ICICI LOMBARD GENERAL INSURANCE
      0.5 4.0/5 "Great!"
      I do have health insurance policy with the ICICI Lombard general insurance company and am with them from the last eight years of time. Service aspects are good one with the ICICI lombard general insurance company, also the coverage value is a satisfactory one and the claim ratio too. I have got around 50% of cost of treatment as claim settlement.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 22, 2017
    • Standard Chartered Bank Personal Loan
      "Be more clear in details"
      STANDARD CHARTERED BANK
      0.5 4.0/5 "Great!"
      The overall experience was good and quick. But there was a lacking of clarity as I did not know the loan account number for a long time and there was no point of contact as well. The rate of interest was of 11.99% with a zero processing fees. SCB needs to be more transparent in the personal loan details.
      Was this review helpful? 0
      , navi mumbai
      Reviewed on Jun 22, 2017
    • LIC Life Insurance
      "Fantastic"
      LIFE INSURANCE CORPORATION OF INDIA
      0.5 5.0/5 "Blown Away!"
      I do have life insurance policy with the LIC of India and I would like to say that they are government own subsidy, so the claim ratio is a satisfactory one. I do have life insurance policy with the LIC of India from the last fifteen years of time. Customer service is a good one with the LIC of India.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 22, 2017
    • Bank Bazaar Customer Support
      "Proper Service"
      HDFC BANK
      0.5 4.0/5 "Great!"
      My loan application was addressed in a proper way. I submitted the loan on their website immediately I received calls from their end and they inquired the information from me and forwarded my application to the bank. I received proper service from bankbazaar.com.
      Was this review helpful? 0
      , agra
      Reviewed on Jun 22, 2017
    • Bank Bazaar Customer Support
      "Fantastic "
      HDFC LIMITED
      0.5 5.0/5 "Blown Away!"
      Bankbazaar.com is very good and am using it from the last two to three years of time. I would like to say all the current scenario of the financial market can be understand through the Bankbazaar.com, also the online portal is very much easy to access.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 22, 2017
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