Recurring deposit (RD)
banks are a worthwhile avenue if you are looking at ways to save and invest
some portion of hard-earned money every month, but want fixed and protected
returns.
A bank RD is a type of
fixed deposit (known as the fixed deposit) that allows you to invest regularly
and systematically every month, allowing you to fulfill particular financial
objectives. Besides, a bank RD will help you deal with liquidity needs provided
you choose the tenure and investment amount carefully.
If you do the
following, you can also create wealth from Bank RD:
- Open an RD account at
high-interest rates
- Invest regularly and do not
neglect to deposit (disciplined) your installment amount.
- Carefully choose the amount and
tenure of your bank, recurring deposit compound interest calculator india.
- Do not stop investing in the RD
account and don't close it before prematurely.
- Keep renewing your RD or make a
fixed deposit of maturity income at the end of the period.
Whether interest earned on bank RD
is taxed and how?
Interest earned on
fixed deposits from a bank is taxable under the Income Tax Act, 1961. Interest
earned on RD taxed based on tax as per income tax slab. However, the bank first
deducts tax on (source) TDS. TDS deducted on the interest earned on your bank
RD based on the estimated total interest for the financial year with your bank
RD.
Interest earned on Recurring
deposit taxed as per the income tax slab on one accrual basis. However, the
bank deducts tax at first source (TDS). In respect of interest earned on your
bank RD, TDS deducted based on estimated total interest on the total of your
bank RD for the financial year.
How can I open a Bank RD account?
Internet Banking
The following methods can be used to open a
Bank RD account:
- Log in and choose the deposit
option on Internet banking (Create Recurring Fixed Deposit).
- Complete required account
details and nominee (On confirmation).
- The selected amount will be
debited from your savings account and your RD account will create
instantly.
- After the RD account is open
up, the 'Recurring Fixed Deposit Advice' will be sent to your registered
email ID.
- Apart from this, you will also be able to see 'Recurring Fixed Deposit Advice' on Internet Banking a day after booking the deposit.
Mobile Banking
- Log in to Mobile Banking and
choose to deposit option (select open RD).
- Complete the account statement
and the nominee (On confirmation).
- The selected the amount debit
from your savings account and created your RD account immediately.
- After the RD account created,
the 'Recurring Fixed Deposit Advice' will be sent to your registered email
ID.
- You can see 'Recurring Fixed
Deposit Advice' on mobile banking the day after registration of the
deposit.
Note:
Not suitable for long-term wealth creation or have a high-risk appetite likes
young investors in their 20s or 30s.
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