Recurring deposit is where a customer can deposit the fixed amounts in small intervals of time to a long period. The main purpose of this recurring deposit is it will develop a savings habit to the patrons. When the term of RD expires, the amount will be credited to the savings account along with the interest. One can open the Recurring deposit with a credit society. The repeated occurrences of the deposits make it different from Fixed deposit.
Advantages of Recurring Deposits:
1. It is useful for planning of the short term goals.
2. Ease of investment.
3. In Flexible Recurring deposit, the member will not be penalized if the amount is not deposited during a specific month. Also, in a flexible RD scheme, customer can be able to withdraw the amount from his/her RD account anytime.
Fixed deposit is a financial investment instrument offered by Credit Societies & Other financial Institutions where investors can deposit money and get a high rate of interest than a normal savings account. This fixed deposit can also be opened through different channels like internet banking or mobile banking.
Advantages of Fixed Deposit:
- Encourages Savings
- Tax benefits
- Safe Investment
- Higher rate of interest
- Option of premature/partial withdrawal in case of any urgent fund requirement
- Overdraft against FD
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