Planned and unplanned financial requirements arise anytime. More often, these financial requirements are significant, so you may be unable to meet them with your monthly income. You may consider applying for Loans to meet your requirements, but this means high liability, which can drain your financial resources. Investments help you to meet various financial requirements. Hence, you should actively invest.

Any investment option requires a financial contribution at least once or periodically. Consider your financial capacity to choose a suitable investment option. If your financial capacity lets you invest only a basic amount, consider a Recurring Deposit. It allows you to start investing by contributing as low as Rs.10 per month.

You can invest in an RD at any leading bank, NBFC, or post office. Banks and post offices are the most popular places to invest. Let us understand the difference between bank and post office RDs to help you decide where to invest.

Investment tenures

You can invest in a Recurring Deposit at any bank of your choice for any tenure between six months to 10 years. This means you can invest in a bank RD to achieve any short, mid, or long-term goal. You can invest in a post office RD for five years. Given this, you can invest in them to achieve any mid-term goal.

Investment amount

The minimum investment amount varies for every bank. It can be anywhere between Rs. 10 and Rs. 100. Typically, all banks do not have any maximum amount limit. The minimum investment amount for the post office RD is Rs. 10. Like banks, the post office has no maximum amount limit. This allows you to choose an amount that is within your financial capacity and suitable for meeting your investment objective.

Interest rates

RD interest rates differ between banks. You can check different bank RD interest rates, compare them, and invest with a bank offering the most competitive interest rate. Use the RD calculator to compare them. Generally, all post offices offer the same RD interest rate, so you can invest at any post office nearest you. Note, if you are a senior citizen investor, you are automatically eligible for a higher RD interest rate whether you invest with a bank or post office.

Security

Note that a bank RD is a low-risk investment option, not a risk-free one. You should be mindful of the credit risk associated with bank RDs. Several banks have introduced the concept of RD Insurance, which aims to mitigate the credit risk associated with the investment. The post-office RD is backed by the Indian government. Hence, it is considered more secure than a bank RD.

Loan facilities

You can instantly apply for a Loan against RD facility with a bank. A post-office does not extend the Loan against RD facility.