RD account Why it is needed for an employee

RD account

          Recurring deposit.

Meaning : "RD" means Recurring Deposit. The investment is made in small amounts every month, and yet the rate of interest offered is as if a big sum is invested for a long term.

Recurring deposit is offered by banks and post office.

It is a simple way to save the money. For salary bank account holders it is much easier to have an rd account. Money transfer to the rd is also much easier. No need of standing in q and not even necessary to visit a bank.

1. Employee while submitting his request for bank salary account on the joining day in the organization could select rd account mentioned on the form.
2. If employee transacts online he could put request for rd account.
3. Visit your nearest bank branch and submit the request for RD.

From mere Rs500 you could begin your savings in an rd account for a specific duration. Based upon your income you could go for different denomination.

In case of need even before maturity you can withdraw the amount from your rd account. Banks will deduct 1 % on interest. And there are no other deductions.

If you don’t need the money even after completion of maturity period you could deposit the same in the fixed deposit.

Why I am writing this article?.

I was working with a big company. Submitted my resignation 2 months before and I served my notice period and left the company on the HR specified date. When I received the F& F settlement it was shocking, it said “I had not completed my notice period so you owe 2 months salary to the company. I must thank the manager for this action.

Job less and no money in the bank saving accounts. RD account came to my aide; my installment was rs 1000 pm so something around 7000 was accumulated. So I withdraw this amount to fund my job search. I thought if I increased my installment amount really it would have not allowed me to succumb to the financial crunch.