Earning an income is as good as the savings you get out of it. But with so many expenses and upcoming investments which come up as your grow older, you may always end up finding yourself with lack of cash at some point in your life. If ever you need to turn to your savings on a rainy day, what are the options can you can consider?
This is where the recurring deposit will work in your favour. With this termed deposit, you will need to invest a small sum of funds on a monthly basis until the deposit reaches its maturity age. At maturity, you will be able to enjoy the benefits of the termed deposits, along with the added interest to the deposit.
Given below are the steps you can take with the recurring deposit along with the RD calculator, in order to make your savings grow along with you:
Know your projected disposable income: Your disposable income will play an important role for any investment, and this is no different for the recurring deposit. You have a choice of how much funds you can invest in this timed deposit. This can be easily done with a recurring deposit calculator. The more amount you invest, the higher the return you will get. Furthermore, if you think your income will increase in the coming future, you can utilize this projected income to increase your return on investment or shorten the tenure. However, at the same time, you need to take into consideration the tenure and the added interest.
Plan your tenure: As you grow older, your expenditures will also increase. Naturally, your income will also increase at a steady pace. This can be utilized to its full potential, especially if you can predict when you are up for an increment. In this way, you can synch the tenure of the deposit, along with your increment. When this occurs, you can also alter the terms of the termed deposit, to invest the added income for a higher return. The RD calculator will go a long way to help you in this step, as you can use this tool to calculate the possible outcome with different tenures and the projected increase in income.
Fix your interest rate: With this termed deposit, you have the choice to opt for an interest rate that will offer you an affordable or high return. While the interest rate will co – relate with the tenure and the principal amount you will be investing on a monthly basis, determining how much of the return on invest you will receive will be in your hands. You can always use recurring deposit calculator to calculate the ideal outcome of each return on investment. Furthermore, as your income grows with the progression with your age, you can opt for a higher investment amount and higher interest rate.