Recurring Deposit accounts on best banks with high interest rates
New Delhi : Recurring Deposit account, also known as RD account is saving scheme for those who want to deposit a small amount each month, instead of depositing a lump sum amount. One thing in such account is that you can make RD as per your interests at any interval of time. But once you start RD, then it is necessary to do it for the entire period.
However, it is not like that if you miss to pay any instalment of Recurring Deposit, your money will be sinking, instead you will have to bear the penalty on it and the interest you get will be reduced. Therefore, it is advisable to make RD according to your pocket so that you don’t break in the middle
RD is a smart process to save small amount of money to meet some of the big financial goals in near future. For example, if after five years you have to buy land to build your own house, for which you will need around 5 lakh rupees. Now if you make Recurring Deposit for 5 years and deposit about 7,000 rupees every month in the RD Account, which gives you 7% compound interest, then after 5 years you will get a little more than 5 lakh rupees on the maturity of Recurring Deposit.
However, if you deposit 7000 rupees in your Saving Account per month, on which you get only 4% interest, then after 5 years, you would get only about 4.65 lakh rupees. So which one is profitable?
However, you will get little less interest in the Recurring Deposit Account than any Fixed Deposit Account in any bank, but when you make huge money by saving slowly and slightly to achieve a future goal, then recurring deposit is the best option.
The minimum duration of Recurring Deposit is 6 months and maximum is 10 years. You can also take advantage of loan on RD. On which interest rate will be the same as the FD. If the holder is getting interest of more than 10,000 / year then 10 percent TDS is applicable on Recurring Deposit.
Now, when you have decided to open an Recurring Deposit account but at the same time confused about bank selection for particular saving purpose, then don’t worry; as we have come up with some best banks which offers RD saving accounts at attractive interest rates.
Top banks to open recurring deposit account:
- Axis Bank
- ICICI Bank
- HDFC Bank
- Kotak Mahindra Bank