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RD Term yr
|Bank Name||Tenure (years)||RD Rate|
|India Post (Post office)||1||6.90%|
|India Post (Post office)||5||7.30%|
|SBI (State Bank of India)||1||6.80%|
|SBI (State Bank of India)||5||6.85%|
Return of top performing Equity mutual funds of 2018 with Monthly investment of ₹ 10,000 for 3 year(s)
|Rank||Fund Name||Yearly Return||Maturity Amount|
|Mirae Asset Emerging Bluechip Growth
Large & Mid-Cap
|ICICI Prudential Banking and Financial Services Fund Retail Growth
Sector - Financial Services
|Canara Robeco Emerging Equities Growth
Large & Mid-Cap
|SBI Small Cap Fund Regular Plan Growth
|Mirae Asset India Equity Fund Regular Growth
|Invesco India Contra Fund Growth
|Reliance Small Cap Fund - Growth
|Kotak Standard Multicap Growth
|Kotak Emerging Equity Scheme Growth
|Mirae Asset Great Consumer - Regular Growth
Equity - Other
Recurring Deposit (RD) is a savings option that helps save for the future. In a RD people can save a small amount regularly for a predetermined period and earn interest on those deposits. Once the deposit matures the lump sum and interest is paid back. Determining the amount one can earn through investing in a RD is easy as the interest rate is fixed throughout the tenure of the RD. It doesn’t change unlike some investment products.
Interest rate on RD vary from bank to bank. The interest rate lie in the range of 3.5-8.5% for different time periods. The interest rate for senior citizens RD account is slightly higher than the regular accounts. Most banks offer an additional rate of 0.25%-0.75% for senior citizens. The interest on RD is compounded quarterly. Any individual, HUF, corporate, company, NRI, government organization, minor above age of 10, and minor below age of 10 under a legal guardian can open a RD account.
Most banks also offer flexi RD. In this the investor can invest a flexible sum of money in each interval depending on his/her convenience. The bank allows the depositor to select a core amount which will the basic investment in each interval and the investor can invest in the multiples of core amount in each interval.
Investing in RDs will give a guaranteed return making it an attractive investment option. Apart from this it has the following benefits.
Here's the formula to calculate maturity value for a Recurring Deposit:
M = Maturity value
R = Monthly installment
n = Number of quarters
i = Rate of interest/400
Interest earned on RDs is taxable. Amount of TDS depends on the tax slab the investor falls in.
Upwardly’s calculator is a handy tool for calculating Maturity Value. It just takes seconds to shows the how much would you maturity amount be. This RD calculator requires you to input certain variables to determine EMI value, which include:
Use Upwardly’s RD Calculator to find how much corpus you would earn at the end of your investment period.
Below is an example, where an RD is taken for a term of 5 years, with Monthly Deposit Amount of Rs 10,000 at 7.5% interest rate. The maturity value of the investment is Rs 6,90,228 at the end of RD term.
Similarly, you can try this calculator for varying combinations of Monthly Deposit Amount, RD Term Year and Interest Rate.
While recurring deposit is a safe investment option and return on investment is mostly guaranteed, its is advised to consider the following factors before investing in a recurring deposit account.
Interest Rates Offered: interest rate offered by banks varies from bank to bank over different term periods. The interest rate offered to a recurring account holder by various banks generally ranges from 3.5% to 8.5% p.a. Return rates vary according to the selected deposit tenure. The rates are usually the highest for medium - term deposits. The rates are usually slightly lower for long - term deposits as the holder of the deposit stands to gain a higher overall interest.
Term Period: Recurring Deposit term periods are divided into three categories:
1. Short-Term Tenure: A tenure that lasts from 6 months to 1 year.
2. Medium-Term Tenure: A tenure that lasts from more than 1 year to 5 years.
3. Long-Term Tenure: A tenure that lasts from more than 5 years to 10 years.
The right way to invest in a recurring deposit account is by identifying the shortest term period plan that offers high rate on interest.
Facility of Premature Withdrawal:While choosing the right recurring deposit, investors should consider liquidity as it is one of the most important factor. RD comes with premature withdrawal facility, but it will require the investor to pay premature penalty. Therefore, while investing choose that charges a low fee on premature withdrawal and offers high rate of interest.
NRIs can either invest in either NRO or NRE Recurring Deposit accounts.
Ans. You can open recurring deposit account in almost all banks including DHFC bank, SBI bank, ICICI bank etc. You don't need to open new account in order to start RD, go to your bank and ask them to open RD account.
Ans. Yes, tax can be saved on recurring deposits if the money is deposited for a medium-term or long-term tenure in the recurring deposit account.
Ans. Yes, the interest earned from a recurring deposit is taxable.
Ans. Yes, TDS of 10% is applicable on the interest earned. If the interest earned on the recurring deposits exceeds Rs.10,000, the TDS will be deducted.
Ans. The minimum tenure for Recurring Deposit differs from bank to bank. For a minimum tenure of 6 months or 12 months, most banks offer RD schemes.
Ans. Minimum Deposit amount varies for every bank and it can be as low as Rs.10.
Ans. Yes, banks generally offer slightly higher rate of interests than the normal deposits. Usually, banks offer 0.25 percent to 0.75 percent more interest than normal RDs.
Ans. Yes, you can withdraw your Recurring Deposit before the term is over. However, you have to bare the penalty that comes with premature withdrawals.
Ans. Yes, you can add nominees in your Recurring Deposit account.
Ans. A depositor should submit a request to the bank requesting the recurring deposit account's premature withdrawal. The interest is earned only for the tenure for which the money was held in the account.
Ans. Partial withdrawals are NOT allowed. Also, you cannot opt for periodic pay-outs of just the interest component.
Ans. A delay of even one day in your instalment payment, will either have interest penalty or cash penalty. Either ways, there will be an affect on your maturity amount. If you have more than 6 outstanding instalments, some banks reserve the right to close the RD account.