Termed deposits is an ideal way to ensure that your funds are well invested. Additionally, it also provides you with ideal returns that will encourage you to invest more. But this solely depends on the type of deposits you have opted for.
The different features of the fixed deposit and the recurring deposit will offer you plenty of benefits, especially if you have a strategic investment plan. But unlike the fixed deposit, the recurring account offers you a lot more advantages. Let us take a look at how you can use these benefits to your advantage of saving today:
Month on month investment
One of the main features of the recurring deposit is the month on month investment. You will be required to invest your fixed sum of funds every month before a particular date. Although in the beginning it may take some time for you to adjust to this process, you will soon develop a habit to invest every month. This also allows you to adjust your spending habits and inculcate better practises in saving your other funds. Over time, you can learn to adjust your income into your savings, expenditures and maybe you can look for other options to invest in.
Good interest rates
The difference in the interest rates of the fixed deposit and the recurring deposit is only of a slight margin. In addition to this, it also depends on the bank or financial institute you are investing in and the rates they offer you. However, since the interest rates depend on the amount of funds you invest, you have a better chance of getting a higher return on investment with a recurring account as compared to the fixed deposit account. This is because, you can always change the amount you invest on a monthly basis, with the required permission of your investing institute. With the right plan and investment strategy, you can invest cumulatively to get good returns over a fixed period of time.
Offers good investment tenure
One of the benefits of the recurring deposit is the tenure. The tenure for this deposit can be anywhere between six months to over 10 years. This is an ideal strategy when you want to save up for a particular investment or venture. Ideally, it also allows you the benefit of investing your unused funds for any emergency need or requirements, while enjoying good returns from it.
Can be used as collateral
No doubt at times, your finances can be strained, to the point wherein your current funds may not be sufficient. However, instead of breaking this termed deposit and using the funds for your requirements, you can always opt for loan, using this deposit as collateral. This will not only protect your investment for the future, but also provide you with a temporary financial relief.
Source : articlesbase.com
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