2 Types of RD Interest Rates

 One of the most popular and preferred investments in India are recurring deposits. They help people start earning returns every month throughout their tenure and inculcating a habit of saving in them. A lot of people trust banks and financial institutions for their products as they are safe, reliable and involve less risk. They are also providing guaranteed returns and allow investors to use their money for making more profit.

One can earn RD interest rates over a fixed tenure ranging from up to 5.2 per cent per annum on their RD account. They are like fixed deposits, but the flexibility of monthly instalments is a unique characteristic of this account. The minimum tenure for the deposit is six months and expandable up to 10 years.

The recurring deposit interest rates differ from banks and on various factors, including the investment category and tenure. Almost all banks have the facility of providing senior citizens with a higher rate of interest than regular customers. Banks offer a variety of interest rates, and apart from standard schemes, they also have additional ones reserved for people to achieve specific goals.

The following are the types of interest rates offered on RD by several banks in India:

1. Regular RD savings scheme: Indian banks offering recurring deposit schemes online through websites and banking apps have specific terms for citizens to follow. Only those individuals aged above 18 years can open this account. Customers can choose their deposit amount, which remains fixed for a tenure of six months to 10 years. The interest gets calculated on a simple or compound basis. They can withdraw the lump sum amount at the end of the deposit term.
   
   
2. RD schemes for senior citizens: Senior citizens can also benefit from a comparatively higher rate of interest from RD schemes. Moreover, there are also some schemes available that help them plan their retirement.

A person should be aware of the recurring deposit rates and choose the options to help them meet their investment goals. Smaller sums of money invested over some time multiply with interest and help them achieve specific goals. They are an ideal option for saving to spend on new gadgets, travel plans and other goals. It does not harm the budget at all and makes all the purchases economical.

These financial instruments help create goal-specific savings to help investors plan their budget. They also offer flexible payment facilities like daily, monthly, and quarterly payments which are accessible on the website as well as the app.