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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
    • ICICI Bank Personal Loan
      "Not Satisfied with the services"
      ICICI BANK
      0.5 1.0/5 "Really Bad"
      I have a earlier experience with ICICI Bank for the personal loan. It has not been a very good experience. The documentation was too much to submit. The rate of interest was very high. It was around 15%. The processing charges was pretty high as well.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Aug 14, 2017
    • review Other Loan
      "Very good customer support"
      JAMMU AND KASHMIR BANK
      0.5 5.0/5 "Blown Away!"
      Since past 10 years I am using Jammu & Kashmir savings account. The customer support is very good with J & K bank. They way they give response to the customer is really good with J & K. They have offered me credit card Personal loan but I didn't take it. I am happy and satisfied using jammu and kashmir savings account .
      Was this review helpful? 0
      , srinagar
      Reviewed on Aug 14, 2017
    • HDFC Bank Personal Loan
      "Excellent Service"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      The HDFC bank executives has disbursed my personal loan within 24 hours. I have applied the personal loan through HDFC net banking, The executive came and collected the documents.they have disbursed the loan within 24 hours of time. The required loan amount has been given and I am satisfied with it. The rate of interest is high with HDFC personal loan.
      Was this review helpful? 0
      , srinagar
      Reviewed on Aug 14, 2017
    • SBI Cards Credit Card
      "Excellent"
      SBI CARDS
      0.5 5.0/5 "Blown Away!"
      My credit card is with State Bank of India. I am more than satisfied with the deals I get on the credit card and it has been perfect till date. The credit limit is also good and the bank has always been on time to send me the details and the billing dates is also convenient for me.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Aug 14, 2017
    • HDFC Bank Credit Card
      "Very good card to use"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      The HDFC bank money back card is easy to use . I use this card to pay the utility bills for shopping . The customer service with HDFC bank is very good, the rate of interest is nominal wuith HFFC bank. I am happy with the credit limit with HDFC bank.
      Was this review helpful? 0
      , srinagar
      Reviewed on Aug 14, 2017
    • HDFC Bank Saving Account
      "Excellent Service"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      The HDFC bank salaried account is with me for past 6 years. The customer support is very good with HDFC bank. The rate of interest is low with HDFC when compared with others. The HDFC bank also offered me a credit card as well the personal loan. I am happy using the HDFC bank services.
      Was this review helpful? 0
      , srinagar
      Reviewed on Aug 14, 2017
    • Bank Bazaar Customer Support
      "Excellent Service"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      The bank bazaar handles the customer in professional way and they fulfill the customers requirement. The customer support has the very good process with bank bazaar. The website of bank bazaar is easy to use and user friendly. I am satisfied using the bank bazaar website.
      Was this review helpful? 0
      , srinagar
      Reviewed on Aug 14, 2017
    • Bank Bazaar Customer Support
      "Excellent Service"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      The bank bazaar handles the customer in professional way and they fulfill the customers requirement. The customer support has the very good process with bank bazaar. The website of bank bazaar is easy to use and user friendly. I am satisfied using the bank bazaar website.
      Was this review helpful? 0
      , srinagar
      Reviewed on Aug 14, 2017
    • ICICI Bank Personal Loan
      "Good Service"
      ICICI BANK
      0.5 4.0/5 "Great!"
      I am not in need of any kind of loan at present so that was the reason I haven't proceed with ICICI bank personal loan . The Customer service is good with ICICI bank. They also gave good response in concern to my personal loan application. The rate of interest of interest was nominal with ICICI bank. I got good service from ICICI bank.
      Was this review helpful? 0
      , srinagar
      Reviewed on Aug 14, 2017
    • Bank Bazaar Customer Support
      "Approachable "
      KOTAK MAHINDRA BANK
      0.5 5.0/5 "Blown Away!"
      It was absolutely good with bankbazaar. Nothing went wrong with bankbazaar for the loan process. I got proper assistance from them. I got the loan from Kotak bank with the support of bankbazaar. Everything was good and the service is completely approachable.
      Was this review helpful? 0
      , pune
      Reviewed on Aug 14, 2017
    • Kotak Personal Loan
      "Good Customer Service"
      KOTAK MAHINDRA BANK
      0.5 4.5/5 "Excellent!"
      To be frank, interest rate is not really good but it is ok. Kotak Mahindra bank offered a personal loan last month. I do not have any dissatisfaction with the bank for the loan process but it would be more convenient if the interest rate is bit less. Customer service is good.
      Was this review helpful? 0
      , pune
      Reviewed on Aug 14, 2017
    • HDFC Bank Personal Loan
      "High interest rate"
      HDFC BANK
      0.5 3.0/5 "Satisfactory"
      I was looking for balance transfer from HDFC to other banks. The actual reason for I transferred my personal loan to other bank is because of the high interest rate. HDFC bank quoted 16% of interest rte which is high for the personal loan, so I done balance transfer.
      Was this review helpful? 0
      , rajahmundry
      Reviewed on Aug 14, 2017
    • Bank Bazaar Customer Support
      "Immediate Response"
      FULLERTON
      0.5 4.0/5 "Great!"
      I glad to say that I had received a quick response from bankbazaar. Actually I was trying to apply for the personal loan online, immediately I had received a response from bankbazaar end. Moreover, they ensured that whether I want anymore information about the loan process.
      Was this review helpful? 0
      , rajahmundry
      Reviewed on Aug 14, 2017
    • SBI Saving Account
      "Best bank"
      STATE BANK OF INDIA
      0.5 5.0/5 "Blown Away!"
      State Bank of India has been good overall in the banking services. The overall experience is good. I hold a savings account and the banking online is also good and there are no charges taken for any of the account features. The services at the branch is also good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Aug 14, 2017
    • Fullerton Personal Loan
      "Interest rate is high"
      FULLERTON
      0.5 3.0/5 "Satisfactory"
      What I feel about Fullerton is the rate of interest is little bit higher than the other banks. Especially when I compared with ICICI bank, Fullerton is on higher side. Other than the rate of interest, rest of the services are quite good and appreciable.
      Was this review helpful? 0
      , rajahmundry
      Reviewed on Aug 14, 2017
    • Bank Bazaar Customer Support
      "Very good services"
      STANDARD CHARTERED BANK
      0.5 5.0/5 "Blown Away!"
      The services at Bankbazaar has been good and the overall experience is fine. It was a very nice process to get the best rates as per the eligibility. The website is very helpful as it is informative with the information of all the banks at one single page.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Aug 14, 2017
    • Standard Chartered Bank Personal Loan
      "Excellent"
      STANDARD CHARTERED BANK
      0.5 5.0/5 "Blown Away!"
      I have taken my personal loan from Standard Chartered Bank and it was a very good experience. It was a on time process and the disbursement was also as needed. I received a rate of interest of around 11.5% and the processing charges was waived off.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Aug 14, 2017
    • SBI Cards Credit Card
      "Average card to use"
      SBI CARDS
      0.5 4.0/5 "Great!"
      To reach the customer service with State bank we need to talk to IVR for a long time and it takes minimum 15 minutes time to reach the executive and After all this struggle once we reach the executive they will keep our call on hold. The customer support need to improved with SBI. I use the SBI simply save card for past 3 years. I pay the annual fee of Rs.500. I am satisfied with the credit limit but not with the service.
      Was this review helpful? 0
      , bangalore
      Reviewed on Aug 14, 2017
    • HDFC Bank Credit Card
      "Good Card to use"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      The Customer service is really good with the HDFC bank credit card department. I am holding the HDFC bank credit card for more than 5 years. I am getting the benefits like reward points, cash back offers with this card, but I don't redeem those points. I am satisfied with the credit limit.
      Was this review helpful? 0
      , bangalore
      Reviewed on Aug 14, 2017
    • HDFC Bank Saving Account
      "Fantaballous banking service"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      The service with HDFC bank is very transparent. The customer service and executives are very clear about their products. I am having the salaried account with HDFC bank for past 8 to 9 years. The rate of interest is low with HDFC bank. The net banking with HDFC bank is really good and it is easy to use.
      Was this review helpful? 0
      , bangalore
      Reviewed on Aug 14, 2017
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