Recurring Deposit (RD) is another safe way to invest money. RD has guaranteed returns. Banks offer RD for a period of one to 10 years. It helps investors to invest a fixed amount every month and create a fund for short term needs.
It works like a Systematic Investment Plan (SIP) of a mutual fund. That is, you have to invest a fixed amount every month in it. On this, you get a pre-fixed interest. However, for this it is important that you have the required amount of money to invest every month.
This investment is suitable for those who do not have the money to invest together but they have regular income in which they can invest some money. Please tell here that the income earned on investment in RD is taxed. Both the money invested in RD and the interest earned are taxable.
Rate of interest
Since May last year, the Reserve Bank of India (RBI) has increased interest rates six times in a row. Many banks have increased the interest rates on RD with a period of 5 years. The repo rate has been increased by 2.50 percent. After that most of the banks have increased the interest rates on RD as well.
DCB Bank (DCB Bank)
DCB Bank pays 7.60 per cent interest on RD with a period of five years. It is offering the highest interest on RD among private banks. If you invest Rs 5,000 every month for five years, you will end up with Rs 3.66 lakh.
Suryoday Small Finance Bank
Suryoday Small Finance Bank offers 7.5 percent interest for a five-year RD. Sunrise is offering the highest interest among small finance banks. If you invest Rs 5,000 every month for five years, you will eventually get Rs 3.65 lakh.
IndusInd Bank
IndusInd Bank gives 7.25 percent interest on RD for a period of five years. If you invest Rs 5,000 every month for five years, you will get Rs 3.62 lakh on maturity.
Ujjivan Small Finance Bank
AU Small Finance Bank and Ujjivan Small Finance Bank are paying 7.20 per cent interest on five-year RD. If you invest Rs 5,000 every month, you will get Rs 3.62 lakh on maturity.
Axis Bank
Private banks Axis Bank, HDFC Bank and ICICI Bank are paying 7 percent interest on five-year RD. IDFC First Bank, RBL Bank and Yes Bank are also offering 7 percent interest on 5-year RD. If you invest Rs 5,000 every month, you will eventually get Rs 3.60 lakh.
