How to Reap Maximum Benefit From RD Investments?
You dream of a better future for yourself and your loved ones. However, this dream remains a dream if you do not make any conscious effort to achieve it. Investments are one of the most viable ways to achieve your dream of a better future. They help you build a significant financial corpus that you can use to achieve various goals and desires, creating the future you want.
Of the various investment options, you may be drawn to Recurring Deposits for their flexibility. They let you choose the deposit amount and tenure that suits you. You earn competitive Recurring Deposit interest rates on your deposits through the opted tenure, translating to decent benefit from the investment. If you aim for incredible benefits from the investment, consider adopting the following pointers:
Invest a significant amount
As mentioned, RD lets you choose the deposit amount. The minimum amount varies for each bank, and there is no maximum investment amount. Hence, choose an amount that would be suitable for achieving your investment objective. Ideally, the more you give, the more you get. Therefore, invest a significant amount in RD. This lets you build a substantial financial corpus over time.
However, before committing to invest a significant amount, be mindful of your financial capacity. You need to contribute the chosen deposit amount throughout the opted tenure. If you lack the financial capacity, avoid investing a significant amount, as it simply leads to financial struggle and incurs missed payment penalties, which could be a big liability.
Scout for the highest interest rate
The interest earnings you earn from an RD entirely depend on the interest rate to which your investment is subjected. Every bank offers a different RD interest rate. Hence, compare to get the most competitive RD rates. Do not just compare the interest rates at face value. Instead, compare them using an RD calculator to obtain clarity of an interest rate’s earning potential.
The RD calculator is readily available on all banking websites. Log in and access the calculator as many times as you like, freely.
Opt for a longer tenure
Investment tenure makes a big difference to your interest earnings. Typically, you should invest for a longer tenure as it maximises your interest earnings. Note that you can make regular deposits throughout the opted tenure. Hence, make sure you opt for a longer tenure only if your financial capacity permits.
Once you have invested for a specific tenure, stay invested for the entire tenure to benefit from the applicable competitive RD rates. You cannot make a mid-term/ partial withdrawal from the investment. However, you can opt for premature account closure but do not do so.