Finance / Savings

How to Invest in Recurring Deposit and Is It Safe to Invest?

How to Invest in Recurring Deposit and Is It Safe to Invest?


  2332      17/02/2015

Question –

How to invest in recurring deposit and is it safe to invest?
- Rajdeep


Expert Advice –

Hi Rajdeep,

Generally people go to banks and park their surplus money in Fixed Deposits. Mark my words, Park Money in FD’s! I am not calling it as: Invest in FDs since generally FDs give you returns just matching the inflation rate in our country and most of the times below the inflation rates post the tax.


So firstly make a firm decision, if you really are looking for such investment.


Anyways coming back to FDs: when one goes and parks his lump-sum money in a Bank Fixed Deposit he gets a return in form of Interest Rates. Currently the rates may vary between 8% to 8.75% depending on the bank and your age. Senior Citizens generally get 0.25 to 0.5% extra.


When one doesn’t have a lumpsum amount but wants to park it on monthly basis out of his earnings, it’s called a Recurring Deposit. Hence FD on monthly basis is RD, simple! You may get 0.25 to 0.5% lower in a RD since it’s recurring!


You can do a RD at any bank and banks are generally considered to be safe in India.
Still decide are you ok with low returns?


- Vivek Karwa



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Vivek Mahajan
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