What Should You Know About Recurring Deposit

Recurring deposit schemes provided by banks are favourite investment choices for many people. Working people, as well as people with smaller incomes, choose RDs as their investment option. Under this scheme, a person must invest a specified sum of money for a fixed period each month and receive interest on their investment. Upon maturity of the RD, the principal sum is returned along with interest.

RD schemes are usually more flexible than FD schemes, which often benefit those who choose to set up an account to save money and build an emergency fund.

How is interest determined for recurring deposit?

To learn more about your investment, use the recurring deposit calculator

For most banks, interest for RD is calculated annually. The formula is:

M = R[(1+i)^n-1]/(1-(1+i)^(-1/3) )

In this,

M is the Maturity value

R is Monthly Instalment

N is Number of quarters

I is Rate of interest/400

Here are some details you need to know about Recurring Deposits:

• The minimum amount of investment required to be deposited each month in an RD scheme is as small as the INR 1000. This is a massive attraction for low-income individuals and wage-earners.
• Since the investor has to spend a portion of his income regularly, inculcating the saving habit is very beneficial.
• Payment may be made directly to one's RD account via the Savings or Current Account.
• You can connect an RD account to your Savings account. Hence it does not require any documentation work in these cases.
• Unlike fixed deposit schemes, where a lump sum amount is to be invested at once, Recurring Deposit does not drain the investor.
• Recurring deposits are the best investment option, especially for those planning to handle short-term financial circumstances such as financing money for a dream holiday or wedding, higher education costs etc. RD interest calculator can help you plan well.
• Most banks allow for the opening of recurring deposits in the name of minor children with the parent or legal guardian holding a joint account. This helps to build investments for future use of the minor.
• Most banks provide loan facility on the recurring deposit amount. This loan is granted up to 95 per cent of the recurring amount of deposit. You can get it in case of any emergency.

To help plan your monthly investment in a recurring deposit, it is advisable to take the help of an RD calculator to plan your investments.

You will find this instrument on your digital banking app as well. This way, banking is on your fingers.

5 Reasons a Banking App Is Preferred

Mobile and internet banking is becoming popular around the world. As the number of smart-phone users increases, more and more people prefer using apps for many reasons. Using a banking app to carry out financial transactions is now a necessity rather than a luxury. Moreover, as customers become more tech-savvy their expectations become higher. Banks which cannot keep up to their customers’ expectations usually lose out over competitors. Digitalisation has revolutionised financial technology and the best banks make the most of what technology has to offer. Here are some reasons why using an app is preferred over other options:

Easy to Use: The primary reason for customers to switch from traditional banking processes to using apps is, ease. An app provides a more engaging and seamless interaction between the customer and the bank. With a simple swipe or a tap, you can make bill payments, transfer funds, apply for products and make investments. No longer do you have to wait in long queues to open an account, an app facilitates instant bank account opening.

Accessible: There may be some customers who still prefer visiting a physical bank branch. There are, however, millions who expect 24/7 services. With the use of internet, the world has become smaller and financial transactions have become more complex. With differing time-zones and demographics, people cannot afford to wait for regular banking hours to begin. With a banking app, millions of customers can carry out banking transactions at any time and from anywhere.

Better Mobility: A few decades ago, customers who travelled frequently had to change their bank accounts based on the location. Now, with an app, your bank moves with you. No longer is there a need for closing and opening accounts, you can simply access your account with an app.

Paperless Transactions: Using an app does away with the need to generate endless and unending piles of paperwork. Traditional banking practices involve plenty of documentation for any process. Which also means clutter and inventory to deal with. You can now carry out any banking transaction, even open a paperless saving account!

Real-Time Transactions: Transactions through a banking app occur instantly. Be it checking your account balance, or more complex transactions like opening fixed deposits, all these take a few minutes.
Customers expect information on their finger-tips, be it computers, mobiles or any other smart device, information needs to be immediate. To keep up, banks need to continuously ramp-up their technology.

Top 4 Digital Banking Apps In India

When financial transactions were carried out through SMS in 2002, the concept of mobile banking started in India. Right from checking your account statement to making a bill payment, everything is done by just a click of the mouse/button. Internet banking was already aiding those who found no time to visit the bank branches.

A banking app has made it more accessible and convenient for the users. Almost every bank and non-banking financial companies (NBFCs) have a mobile app.
Following are some of the front-runners in the digital banking app category:

• DBS Digibank: Want to join the #unbankit revolution? Then Digibank is your go-to banking app. DBS through their Digibank services offers a plethora of facilities with the most crucial one being opening an account without any paperwork, signatures or visit to the bank. All you will require is an Aadhaar or PAN card to open a digisavings Also, get all your bank queries answered through their virtual assistant that is available 24*7. It also comes with high safety standards and is available for download on all Android as well as iOS phones.
   

• HDFC Bank: This mobile app allows you to view your account summary, transfer funds, make all kinds of bill payments, etc. Users can also customise the ‘My Menu' tab where all the essential services are in the offing. The HDFC banking app is available in Hindi as well. They also have a ‘LITE’ version which makes it compatible with those using lower internet speed. However, it does not contain all the features that the regular app contains.
   

• ICICI Bank’s iMobile: ICICI bank’s app enables the users to open fixed deposits and recurring deposits. You can also manage your insurance schemes with ease. You can also locate the nearest ICICI bank ATM, move cash using UPI medium,
   

• Axis Bank: Another leading game changer in the digital banking app category is the Axis bank’s axis mobile application. Apart from the usual fund transfer and summary of account statement, you can also schedule your credit card payments. You can also convert your payments to EMIs. Also, Axis bank allows you to close your debit card and set a limit on purchases using a debit card. The axis bank app is also social-friendly as you can tweet feedback. In case of any query, you can also request for a call with the customer care.

Make your decision wisely and opt for a banking app that suits your requirements. Apart from these apps, banks are also launching smartwatch apps to assist you with finances in a secured manner.