Recurring Deposits are a great way to start your monthly savings. You do not require a large amount of money to start an RD. Adding attractive interest rates and security makes RD a popular choice among youngsters and adults alike. Recurring Deposits encourage us to start saving at a young age. However, many RDs are available, and it can often get confusing:

Basic RDs

Basic RDs are the most popular and regular type. If you are over 18 years of age, you can easily open a Savings Account. You need to select a suitable tenure and fix the amount you wish to deposit. There are no fluctuations in RD interest rates. You get the calculated profit at the end of the tenure. You cannot deposit an additional amount in the RD once it is opened; the only option is to start another.

Tax-Saving RDs

Many banks offer you the option to open a Tax-Saving RD. It helps you save tax according to the Income Tax Act of 1961, section 80C. If you earn interest of more than 10,000 rupees on your RD, it will fall in the tax bracket. You can research more about the Tax saving RD account if you want taxa in their taxes.

Minor RDs

Parents are always worried about their kids' future, whether their education, wedding, or other expenses. However, a Minor Recurring Deposit account is an easy solution to all these expenses. Parents and Guardians of minors can open a Minor RD. You can open an RD account for your child at a young age. It will be the first initiation from your end towards your child’s better future.

Senior Citizen RDs

Senior Citizen RDs offer higher interest rates. Anyone above 60 is eligible to open a Senior Citizen RD. If you are a senior citizen, it provides additional security to senior citizens, and you can profit from the increased interest rate. Also, the compounded interest rate can be used to build your wealth.

NRE RDs

People in countries other than India can open an NRE RD. As an NRI, you can start a NRE RD account to start your savings in Indian currency. You can start investing a minimum of 1000 rupees to kick-start your savings journey. The interest you earn from this RD account is not taxable in India.

Conclusion

RDs are an easy investment choice. You can learn a little about market fluctuations and growth by depositing a recurring deposit account. The profit you earn from your RD will be deposited into your account at the end of the tenure. The only catch is finding the correct account for your needs. Make maximum use of the different advantages associated with these RDs.