How to make the most of your RDs?

Becoming financially independent is important because it lets you live your life the way you want without anyone's interference. Earning money through professional activities is the most common path to financial freedom. However, you should take other steps as well. Investing is an incredible way to achieve financial independence. It ensures you have money to take care of yourself in any situation without being dependent on anyone.

There are many investment options to consider. A Recurring Deposit or RD lets you periodically invest a fixed amount for the tenure of your choice. Over time, you can build a significant financial corpus and earn modest interest. Use the RD calculator to get an idea of the corpus you can build by opening an RD. Here are ways to make the most of your RD:

• Start investing early

The RD works on the concept of compounding. Hence, you should start investing early so that you can benefit from the power of compounding for a longer time. This way, you can build a substantial corpus. Such a corpus lets you realise various financial goals and sail through emergencies.

• Scout for competitive RD interest rates

You can open an RD at any leading bank. Every bank offers a different RD interest rate. Therefore, compare various interest rates and invest with a bank offering the most competitive RD interest rates. This translates to fantastic returns for you. Note that the RD interest rates also vary depending on the investor's age. If you are a senior citizen investor, you are eligible for a higher RD interest rate. This ensures you earn decent returns to manage your expenses and obligations in retirement.

• Choose a suitable investment amount

All banks let you choose your investment amount. The minimum amount varies between banks, but it is highly affordable. There is no maximum limit for RDs. Consider your financial capacity, investment objectives, and obligations to choose a suitable amount. The higher the investment amount, the better.

• Opt for a Flexi-Recurring Deposit

A Flexi RD offers maximum investment flexibility. You can invest a higher amount at any time. This puts the money that you could have spent carelessly or left idle in your Bank Account to work, allowing you to make the most of your hard-earned money.

• Avoid premature closure

An RD is a fixed investment option that helps you remain focused on your investment objectives. You cannot withdraw partially, but you can opt for a premature closure. However, avoid opting for premature closure, as you will incur a penalty and lose interest. Consider applying for a Loan against an RD. This way, you can protect your investment and meet your financial requirements.