What is Recurring Deposit (RD)?
Recurring Deposit (RD) is a savings scheme where you deposit a fixed amount every month in a bank.
It helps you build savings regularly and earn interest.
Example (Simple Understanding)
If you deposit ₹2,000 every month in RD, after a fixed period you receive total savings + interest.
How RD Works
- Deposit fixed amount monthly
- Choose tenure (6 months to 10 years)
- Bank pays interest
- Maturity amount = total deposit + interest
Benefits of RD
- Safe investment
- Disciplined savings habit
- Guaranteed returns
- Easy to start
RD vs Fixed Deposit
- RD → Monthly deposit
- FD → One-time deposit
- RD builds savings gradually
- FD requires lump sum
Learn FD:
What is Fixed Deposit
RD and Interest
Interest plays a key role in RD returns.
Learn here:
How Bank Interest Works
Who Should Use RD?
- Salary earners
- Beginners
- People with regular savings habit
Frequently Asked Questions (FAQ)
Is RD safe?
Yes, RD is safe as it is offered by banks.
What is minimum RD amount?
You can start RD with small monthly amount like ₹500.
Which is better RD or FD?
RD is better for monthly savings, FD for lump sum investment.
Can I withdraw RD early?
Yes, but with some penalty.
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