Which is a better investment option

Fixed deposits and recurring deposits are two popular investment schemes available for
investing funds for the long term. The investments are not subject to any market risks and
can earn a fixed rate of interest for a fixed tenure. While the two investment schemes have
a lot of striking differences. Here are some differences between the two which will help
you to decide which scheme is better :

Mode of investment: The major difference between the two is that in fixed deposits you
have to make a lump sum payment that you want to invest in a fixed deposit account.
However, in the case of RD you have the option to make fixed payments at regular
intervals.
Returns: The returns earned on fixed deposits are higher than the recurring deposits
because the amount of the fixed deposit is invested together at the beginning of the
investment period so the interest will be calculated on the same principal amount for the
same tenure. However in recurring deposits, as you will pay monthly payments at regular
intervals in your account. So the interest will not be calculated on the same principal
amount and same interest. The interest for the first installment will be calculated for 12
months and for second and the third installments the interest will be earned for 11 months
and 10 months.

Read More in Detail:FD vs RD which is a better investment option



Comments

Post a Comment

Popular posts from this blog

Claim for Income Tax Refund

Image
An income tax return is a document in which you file with the Internal Revenue Service or Income Tax department reporting your income, profits and losses of your business and other deductions as well as details tax liability. An income tax refund is a process of refunding tax when an assessee declares details of income, deductions, exemptions, taxes payable on their taxable income and the IT department calculates that the payer in excess has paid the tax. Filing an income tax return is mandatory to claim tax deductions, eligible exemptions like long-term capital gains exemptions, which might eventually bring your taxable income to zero. Individuals whose annual income is more than the basic exemption limit, i.e. Rs 2.5 lakh need to mandatorily file their income tax returns. Even when there is no tax liability, an income tax return (ITR) must be filed if the total income exceeds the threshold as mentioned above. In case you disagree with the tax demand raised in the notice f
Read more

How to Avoid Small Business Mistakes

Image
Starting a new business in today’s dynamic environment with minimum resources is a big task. Small businesses often suffer a lack of capital, poor workforce, or lack of expertise and get shut down.  However, all these difficulties can be overcome if you can avoid the following mistakes in your small business:  1. Make sure you are well aware of the concept you are going in with and how to execute it. A proper product and marketing strategy is essential for business growth.  2. The success of any business is dependent highly on how it is managed. A well-managed business can do well even with less resources, and if the management is poor, then the bundle of resources will not be able to save the business. 3. Another important business mistake to avoid is underestimating the competition. Never ignore the competition and take appropriate steps to deal with it.  4. Even if you have an amazing product or service, it still of no use if people do not know about it. Reg
Read more