What Is The Full Form Of RD In Banking?
RD full form in banking is Recurring Deposit. RD account’s main benefit is that you can earn a fixed interest rate on the invested amount without investing the whole amount or a large amount. For example, with Fixed Deposit or FD, you first create an FD with an amount let’s say 30 thousand rupees. So depending upon the bank, you’ll earn an interest rate on the whole amount (30k in this case) with a compounding effect. Whereas the interest rate would be a little less in the case of RD, you won’t need to invest the full amount, instead, you earn an interest rate on recurring investments.
What Are The Benefits Of Recurring Deposit?
First of all, because you would have to invest a specific amount every month, ultimately it helps you build a saving habit over time. Along with that, you can start an RD account with as low as 10 rupees, and still, you’ll get quite a good interest rate. If your RD account is mature enough, you can apply for loans based on your deposit and the maturity of your RD, which is another plus here.