Have a dream? Here's you finance it |
Posted: June 10, 2018 |
Do you want to buy an expensive phone, or go on a short trip, or buy something nice for your partner? A recurring deposit can help fund your dream. Every person has dreams that are unique and special to them. While one person may wish to buy a house for their aged parents, another might just wish to holiday abroad every year. Still another might want to buy the latest iPhone, while another may wish to set aside the fees for their child’s next semester. One way of ensuring that your cherished dream comes true, is to invest in it. You can do this by opening a recurring deposit account with your bank. Here’s why you should consider it: * It is one of the most affordable options to invest and save money. A recurring deposit differs from a fixed deposit; in the latter, you deposit a lump sum amount of money at a certain rate of interest for a certain tenure. In a recurring deposit, the same lump sum is broken down into equated monthly payments. You can open a recurring deposit account for as little as Rs 2,000 per month. This makes it one of the most affordable investment options available to investors at the moment. Do find out the recurring deposit interest rate being offered before creating the account – the higher the rate, the higher is the earning on it. At the end of the tenure, the invested sum plus the interest payable on it is returned to you. Use a recurring deposit calculator to base your calculations. * It encourages regular savings without special effort on your part. Like countless others, you may wish to save money every month – but are you always able to do it? Saving money despite endless expenses seems like an uphill battle you fight every month. No sooner do you decide to save money than some expense comes up, and you have to divert the savings for that expense. But when you have a recurring deposit, the monthly deposit amount is auto debited from your bank account on a particular date. Thus, you only need to ensure sufficient account balance for the auto debit – no other intervention is needed from your end! Thus, the recurring deposit is an easy option to exercise, and it also encourages monthly savings quite easily. * It shows predictable growth that you can chart out even before making the investment. Though market rates may fluctuate on other investments, the recurring deposit interest rate remains constant throughout the deposit’s tenure. Thus, you can predict the eventual growth of the deposit at the outset – use a recurring deposit calculator to find out how much the potential growth of the investment will be basis the recurring deposit interest rate and the tenure. However, do note that interest earned over Rs 10,000 on the deposit is counted as income. This minor hiccup aside, you can safely invest in a recurring deposit for a period of three or more years. Leading banks in India offer recurring deposit interest rates exceeding 7% for long term deposits.
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