An RD is a special term deposit offered by banks where you deposit a fixed amount every month for a predetermined period. It earns interest similar to FD rates.
RD Formula
M = R ร [(1+i)^n โ 1] / (1 โ (1+i)^(-1/3)) Where: R = Monthly deposit, i = Rate/400, n = Quarters
What is the minimum RD amount?
Most banks allow RD starting from โน100 per month with a minimum tenure of 6 months.
RD vs SIP - which is better?
RD offers guaranteed returns with low risk. SIP in mutual funds can offer higher returns but with market risk. RD is better for conservative investors.