Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Recurring Deposit is a bank product where customers deposit a fixed sum monthly for a chosen tenure, earning fixed interest on accumulated balance.
RD is like a monthly FD — save fixed amount every month with guaranteed interest, good for short goals.
Interest typically compounded quarterly using formula averaging instalments. Penalty on missed instalments or premature closure. Lower returns than equity but predictable for 1–3 year goals like vacation or gadget purchase.
₹5,000 monthly RD for 2 years at 6.5% yields roughly ₹1.28 lakh total — ₹20,000 interest on ₹1.2 lakh deposited.
RD gives fixed return. SIP in debt fund may offer similar yield with slightly more flexibility but no rate guarantee.
Banks may charge penalty or reduce interest. Auto-debit failure should be corrected promptly to avoid account closure rules.
Yes, taxed at income slab like FD interest. TDS may apply if total interest from bank exceeds notified limits.