The Full form of RD is a Recurring Deposit. It is interesting to know about RD. That is a Recurring Deposit. Here, it is abbreviated as RD. However, it is a kind of term deposit. Similarly, the Bank of India offers it. In fact, RD helps people with regular cash flow. In general, the RD focuses on cash flow. Say for a period of 1 year or so. Mostly, RD helps in earning interest for an amount. Both RD & FD facilitate cash flow. But RD is, the amount has to be paid regularly. On the other hand, FD will is a fixed amount. Yet RD mainly helps in encouraging saving. The interest earned will also be more comparative to FD. FD is a fixed deposit. Let us see how RD works! First, the amount has to fix. That would be for a specific period of time. Say for instant Rs 1000/1 yr. Secondly, the time period is for 1 year. Third, Rs 1000/- will have to be paid every month. That will be for a period of 12 months. Finally, on the maturity of the 12th month. Along with an interest. The aggregate amount i.e principal + interest. As a result, the RD amount is issued to the investor.
RD and FD
When returns in FD or RD are analyzed, then FD appears to give higher returns. and The reason is that in RD, the account holder deposits monthly, and therefore, the interest is also collected respectively. Normally, the FD amount is deposited once and is a bulk sum that earns a tremendous interest rate.
How this deposit interest is calculated?
M = Maturity value of the recurring deposit
R = Monthly based recurring deposit to be paid
N = Number of tenures to be filled
I = ROI or you can say the rate of interest
The most common question is which is better FD or RD?
FD interest amount is higher as compared to RD
You can open an RD account with any bank in India. The documents required are Passport, PAN card, Voter ID card, Electricity bill, Driving license, Bank statement, Government ID card, Certificate/ID card, Photo ration card, Senior citizen ID card, etc. There is no risk involved in Recurring deposits (RD).
The tenure or duration of Recurring Deposit (RD) begins at 6 months. After that, it can be maximized to 10 years. After the first 6 months, there is an option to choose tenure in multiples of 3 months, that is 9 months, 12 months, 15 months, etc.
| Term | Full Form |
| RD | Recurring Deposit |
People May Also Check
| FAQ Full Form | FDI Full Form |
| FMCG Full Form | FTP Full Form |
| GATE Full Form | ICH Full Form |
| GPS Full Form | IELTS Full Form |
| HBSAG Full Form | IMO Full Form |