Recurring deposits are a debt category investment tool. In this deposit, a particular amount of money is deposited every month to accumulate wealth for a longer period of time. The features of it are:

• It requires small amount of money to start with.
  • It gives an interest rate of 8 to 9 percent.
  • It is a debt instrument and hence it is risk free.
  • It requires minimum paperwork to open a recurring deposit.
  • It can be nominated to a second party in case of an unfortunate demise of the first party.
  • It helps to create wealth over a long period of time. It inculcates the basic habit of savings in a person.
  • Modern age deposits come with variety of features. The Flexible Recurring Deposit of United Bank of India enables a customer to deposit any amount per month above a stipulated lower limit. Thus if a customer has got excess cash, he can safely park it in this said deposit.
  • Corporation Bank announced a Recurring Deposit in which the end proceeds will go to purchase Gold for the customer. It is an excellent tool to save money to purchase Gold for future purpose.
  • These deposits are also eligible for loan that means loan can be taken against the deposits without breaking these deposits.
  • Any number of installments can be given or deposited in advance.

Shortfalls:

• These deposits have no equity exposure, and hence they cannot provide extraordinary returns.
  • They are also not eligible for Income Tax deductions.

Conclusion:

In general, these deposits are excellent to gather wealth over a long period of time in a safe and efficient manner.