A recurring deposit, or an RD as it is better known, is a very popular form of investment in India. It is a safe and low-risk investment that promises to fetch the investor some fixed returns. There are several other benefits that you get when you start an RD and this is why you should definitely consider adding a few recurring deposits to your financial portfolio. But how to ensure you get the best RD interest rate? It is quite simple – you just need to compare the RD rates of the different banks and NBFCs and you will know where to invest. Also, you can use an RD calculator online to know the RD amount. Read on to know more.
What is the best interest rate for RDs?
The different banks and NBFCs offer different RD interest rates. For example, the Jana Small Finance Bank offers an interest rate of 7.5% on the RD with a tenure of 36 months. The same bank increases the tenure to 8% if the investor is a senior citizen. HDFC Bank on the other hand offers an RD interest rate of 5.5% on RDs of 90 months or more.
As you can see, the RD rates are quite different from bank to bank. Also, this rate is dependent on other factors such as the tenure of the recurring deposit investment. You get some very good rates of interest on your RD investment when you stay invested for a longer period of time. This is why you should do your research and also use an RD calculator online to see which bank offers the best rate and returns.
How to use an RD calculator?
To use an RD calculator online, you need to enter the following details:
- Enter the monthly investment volume (in INR)
- Enter the duration for which you want to have the RD
- Enter the expected rate of return
Once you do this, the calculator will quickly show you the results and you can understand what the RD returns would look like.
Advantages of getting a good interest rate on your RD investment
Now, let us understand why you need to research and find the best RD interest rate:
- Helps to fetch higher returns –
If your recurring deposit earns higher interest, you will automatically receive a higher return from the investment. This will help you to make effective investments and you will be successful in your RD.
- Helps to reach financial goals –
Every investment is made keeping a financial goal in mind. For example, you may start an RD to pay for your child’s college admission in a few year’s time. If you have an RD that brings in high interest, you will be able to successfully pay the fees and get your child enrolled in the best university.
- Helps to make a sound investment –
And finally, you get to make the best investment when your RD fetches the highest possible interest.
As you can see, these are very handy benefits that you get when you open a recurring deposit with a healthy rate of interest.
The bottom line
A recurring deposit is a very beneficial and safe type of investment. You should definitely consider getting a good RD from a good bank or NBFC. However, make sure you settle for a good rate of interest on the RD. Also, remember to use an RD calculator to see how fruitful your investment is going to be. If you take care of these simple things, you will be able to make a very good RD investment and then you will proudly reap the highest yields.