Instead, by creating a Recurring Deposit, they will ensure their income is getting channeled into investments and more importantly that they earn interest on their money – eventually leading to good investing habits being formed. Typically, new investors do not fully understand the principles behind personal finance and so to protect their money from the they leave funds dormant in their savings account or use them up for some other purpose. I have been unequivocal in stating that almost all new investors who enter the world of personal finance should start with Recurring Deposits. 1,000 in a piggy bank on a certain date for the next 2 years, except that in Recurring Deposit you also get interest income (which is not an option with the piggy bank). 1,000 will be invested from your bank account and it will get accumulated in the Recurring Deposit and will accrue interest at the rate that was offered. 1,000 Recurring Deposit for 2 years 9% interest. Each month that fixed amount is invested and you earn interest (at a predefined rate) on the Recurring Deposit.įor example – You can open a Rs. You open a Recurring Deposit for a fixed amount and for a fixed tenure. Recurring Deposits are often rightfully called one of the simplest financial products in the world. However, many investors are still confused regarding this straightforward product.Īlso, I will share tips on extracting the maximum benefit out of Recurring Deposits and on using this product to lead a better financial life. Most investors know about Recurring Deposits and have used them at some point of time. Today I will talk about the simplest financial product known to me – the Recurring Deposit or RD as it is called.

Hdfc recurring deposit calculator