Why Include A Recurring Deposit In Your Retirement Plan?
Most people in India live life pay cheque to pay cheque. You use the paycheque to cover monthly expenses and fulfil financial obligations. But what happens when you retire and receive no monthly pay cheque? How will you lead your life then? Make investments to ensure you have the money required to lead a comfortable retirement life without being dependent on others or working.
There are innumerable investment options for retirement planning. The Recurring Deposit is an unpopular but beneficial investment option you can consider including in your retirement plan. A Recurring Account is a low-risk investment option that earns you modest interest. Here are reasons to invest in an RD to secure your retirement:
Low-risk
An investment in Recurring Account is not linked to market volatility, which ensures capital protection. Hence, you need not worry about using your hard-earned money with the investment. An RD earns you returns based on an interest rate. Given this, the investment returns are often predictable and decent, ensuring you earn something substantial from your investment.
Customisable
Do you wish to invest for your retirement but have limited resources? RD is a suitable investment option to explore. It gives you the freedom to choose the investment amount and tenure, letting you build a financial corpus according to your suitability. The minimum investment amount differs between banks, but it may be affordable. There is no maximum investment amount.
You can invest in an RD for any tenure between six months to 10 years. You should consider your financial capacity and investment goal to determine an apt investment amount and tenure.
Competitive interest rates
As mentioned, RD investments earn returns based on an interest rate. Every bank offers a different interest rate. Compare different interest rates and invest with a bank offering the most competitive Recurring Deposit interest rates to make the most of your investment. Use the RD calculator to get an idea of the interest you can earn from your investment. The calculator offers accurate results within minutes. Log on to any banking website to access it.
Withdrawal restrictions
Retirement planning is a long journey. You may have several dreams and desires along the journey. For instance, you may be tempted to make a withdrawal from your investment to go on a luxurious trip to Europe. While the thought of a Europe trip is a great idea but, making a withdrawal from your RD investment is a bad decision.
RD discourages partial withdrawals, preventing you from making such bad decisions and keeping you focused on your retirement planning goal.
Loan facilities
Suppose you want to take a Europe trip. You can do so by applying for a Loan against Recurring Account. Leading banks extend Loan amounts worth 80-90% of your RD value at a competitive interest rate for a flexible tenure.