Difference between FD and RD
In case of FD you invest a lump sum amount and so the entire money earns interest for the specified period. If we take example of 1 year then in a recurring deposit the first installment earns interest for 12 months period, the second for 11 months, third for 10 months and so on.
FD , you create from your already saved money but RD is a process to save money on monthly basis . We suggest On maturity of RD maturity amount should be invest in FD.
We suggest to invest in an innovative products called RD Flexi or Flexi RD in which you a core amount is fixed on RD but you can invest 10 times or 20 times of core amount in RD.
How to take advantage from bank :
Example : Apply for a Flexi RD of Rs 1000 for 10 years . So u have to invest at least Rs 1000 per month as RD installment and if you saved higher than Rs 1000 ( if 10 times permitted then up to Rs 10000) u can invest on same rate of interest . If u r unable to deposit more than Rs 1000 then their is no penalty.
Suppose that interest rate will fall down in future then you have opportunity to invest higher amount on higher rate as per your contract with bank.
Suppose that interest will increase in future then don’t invest higher amount and only deposit core amount in that RD . Open another RD with new ( higher) interest rate.
So by this method you can earn highest interest from bank without taking any risk.
Keep investing in Flexi RD . Enjoy. Will update you with more tricks shortly .