Fixed
Deposits and Recurring Deposits are among the most popular investment options
in India. If you are planning to invest in either of this, you must be aware of
the differences between Recurring Deposit and Fixed Deposits. It is very common
for the first time investors to get confused between RD and FD.
While
both Recurring Deposit and fixed deposits are offered by most of the banks in
India, each come with their own advantages and disadvantages.
Before
investing in a Recurring Deposit or Fixed Deposit scheme, you must be familiar
about certain important features of the scheme such as rate of interest and
investment limit.
Tax on Recurring
Deposit Interest rates
Recurring
Deposit is a very popular investment scheme amongst the risk averse Indians
mainly because of the good returns and savings benefits that it offers. In a
Recurring Deposit scheme, you will have to deposit a fixed amount of money
every month for a predefined period of time and the amount will fetch you
interest. But, for interest that you earn on Recurring Deposit investment
amounts, 10% will be deducted as TDS. Also, the Tax Deducted at Source (TDS)
will be 20% if the Pan information is
not provided. The Tax Deducted at Source (TDS) varies depending on your annual
income, your age and the interest that your accrue on your RD amount.
Which Banks Offer
the Highest Recurring Deposit Interest Rates in India?
One
of the most preferred investment options in India, Recurring Deposit schemes
offer good interest returns with almost no risks involved. In a recurring deposit
scheme, the investor will be required to make deposits of a fixed amount every
month over a fixed tenure. Almost all major private and Government Banks in
India offer Recurring Deposit schemes with competitive interest rates.
Generally, the interest rate for a RD scheme is based on several factors like
tenure, principal amount and the plan that you choose. Also, the interest rate
for recurring deposit schemes vary from bank to bank and it is important that
you are well informed about the interest rates offered by all major banks so
you can zero in the perfect Recurring Deposit plan for investing your hard
earned money.