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4 Ways To Control Spending And Start Saving With A Recurring Deposit
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A recurring deposit is a great financial tool that allows you to invest on a monthly basis and at the completion of the tenure; you will gain more return based on the interest rate you have selected. The recurring deposit is an ideal way to reduce your unnecessary spending and increase your savings.
With a recurring deposit, you must invest religiously every month where the amount will be transferred from your bank account to the recurring account. Once you manage to invest on a monthly basis, you will develop a habit to save, while also reducing the amount of unnecessary expenditure on other items. With this investment, you will earn a substantial interest on the amount you have invested which you can either reinvest, or save for further use.
Can be started on a low amount
A recurring deposit can be opened for as small an amount as Rs.100. Most public banks will start with a small amount, whereas private banks will start with amounts higher than Rs.500. This is highly beneficial as you can start investing at a young age even though you earn a small amount. This works as beneficially as a fixed deposit account as you will be earning with the same interest as a fixed deposit.
Ideal for short term goals
If you have plans to buy a car, house or even invest in other options in the near future, this can be easily done with a recurring deposit. All you have to do is decide the amount you would like to invest every month, which does not have to be a big amount. Plan it in such a way that your tenure period matches with the execution of the short term goal. At the end of the tenure, you will receive the deposit with additional interest, which can be sufficient for a tablet, car down payment or a smart TV as well.
No tax deduction at the source
If you invest in fixed deposit account, there is a chance you will be subjected to the TDS, which is also known as the tax deduction at the source. In this case, the source is the bank which would deduct the tax from the interest you earn. At the end of the year, you would have to file a claim in order to claim this deducted amount. All this hassle can be avoided with a recurring deposit. Thus you need not run about wondering whether you will have to file claims or be prepared for loss of finance when you invest.
Author Bio :- Neha Sharma is a finance student who loves writing about Recurring Deposit and more. She is delighted to share her knowledge with the public and to those who are interested.
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