Today I try to explain the RD scheme in SBI for beginner investors. There are many beginners who join into a new job, may be private or government, seeking no risk investment plan. They can go with RD and obviously RD scheme of SBI. Go to your local SBI branch, open a RD account in SBI, invest and just relax.
Let’s know what RD is?
Before going to open a RD account, we know what a RD account is. There are many beginners in money investing fields, who have no knowledge about proper utilisation of money. No problem, this site is ready to inform and explain several types of valuable investment fields.
Definition of RD-
The full form of RD is Recurring Deposit.
Deposit or investment of a particular amount/fixed amount of money every month for a particular period of time is known as recurring deposit.
Recurring deposit has its rate of interest. End of the term consumer or investor is given back the total deposited amount including interest of that period.
Benefit of RD-
RD has its several benefits. RD can give these benefits to a new investor or a senior who is well informed in investing fields.
RD has no risk investment. You have to research other investment fields, but in respect of RD you just compare the interest rate of several banks or post offices and go ahead, nothing else.
Appropriate for Beginner Investors-
RD investment is appropriate for a beginner. As a beginner you can not understand the critical terms and conditions and several difficult investment fields. There are various fields where there is low risk, medium risk or high risk. Your money may fall in loss or you may fall in danger.
So RD is easy to understand and no risk deposit you may choose. Yes it may not be a high profit field.
If you have not a large amount-
It is very useful for an investor who does not have a huge amount to invest in any field. E.g. fixed deposit or purchasing Bond or anything else. But an amount comes on a regular monthly basis. They obviously choose this field of investment.
It helps to pay Annual Premium-
I try to pay an annual premium of insurance after maturity of RD and I even tried to purchase garments of any festival after maturity of a RD.
If your annual premium or any annual festival expenses fall you will have trouble paying a huge amount. You may open 1 or 2 RD accounts according to your priority and terms of period before premium for festival date.
Why should you open an RD but not a saving account-
There are many differences between a savings account and an RD. Majorly two are very common.
A Savings account is more user-friendly-
It means you can withdraw any amount anytime easily if you have an ATM or debit card or even with withdrawal slip or check.
RD accounts are not user friendly or easy to withdraw. But you can withdraw your amount through application prior to your terms to an end. And it always available only in banking hours, not 24*7.
Rate of interest-
Saving account has very very low interest. Now the interest is going to be between 2-3%. It differs from bank to bank.
But RD is always a high rate of interest. Now the rate of interest is going on between 5-6.5%. It also differs bank to bank.
Except these there are more differences between RD and savings accounts. But I think it is not very essential to describe here now.
How to open a RD-
Opening an RD is very simple. You can open it through online net banking or direct going to a bank. Private and government banks both are always welcome to take their opportunity.
As a beginner at first go to a government bank. They are reliable and open with low amounts Recurring almost at least Rs- 100 only. But private banks can force to open a RD with large amounts.
As you need a savings account to open an RD with respect to a private bank, the minimum balance of the savings account may be a large amount. But in a savings account of a government bank you have to deposit a minimum of Rs- 500 only.
At present RD account operated by SI(Standing Instruction). It means you have no need to deposit directly into your RD account. You have to keep sufficient balance in your savings bank account. Your recurring amount will continue fetching from your savings account. You may say it another way that savings accounts send recurring amounts to your RD account regularly. So you have to keep a sufficient amount into your savings account more than the minimum amount after debiting from the RD account.
So go to your bank where you have a savings account. Or go to any other bank and first open a savings account and then apply for opening an RD.
As most of the banks are CBS(Core Banking Service), so no need to go to your mother branch.
Suppose you have a savings account in SBI in any branch of Kolkata. You can open your RD in any branch in West Bengal as well as anywhere in India also.
RD Scheme in SBI-
I always recommend taking the RD scheme of SBI as a beginner. If you already have a SBI savings account, no problem to take the opportunity of RD scheme in SBI. Or if you have not any savings account in SBI, go to your nearest SBI branch taking you KYC, photo. Open your savings account immediately. It takes 3-5 working days to get your account numbers. And then again apply for opening your RS.
Decide when you will need to encash your RD and how much amount to be needed at the end of the term. Then proceed to open RD and divide the total amount whatever you need by the recurring installment number.
Suppose you need Rs-15000 after 1 year. Then your term will be for 12 recording installment numbers. So you can open your RD account for 1 year(12 months) for 1200 rupees per month. You will get 14400+ interest approx Rs- 15000 after one year.
Opening an RD Account you must have a Savings Account. Opening an online RD Account and you have Facility of internet Banking. Otherwise you can not open RD account.
Rate of interest of RD Scheme of SBI-
|Duration||Rate of Interest for General Public||Rate of Interest for Senior Citizens|
|1 year to less than 2 years||5.00%||5.50%|
|2 years to less than 3 years||5.10%||5.60%|
|3 years to less than 5 years||5.30%||5.80%|
|5 years to 10 years||5.40%||6.20%|
Do not think the RD is always fulfill your demand of festival expenses or payment of premium or any other needs. You can grow your money investing into an RD account for a long term period, maximum of 10 years in the RD scheme of SBI. Recurring amounts may vary according to your needs and your income. I just give an example as a small and as a beginner investor.
- Easiest Investment Strategy at the age of 25 to 40.
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Not only one RD, it may be more than one. Maybe several banks also.