A Recurring Deposit (RD) is a savings option where individuals deposit a fixed amount regularly, typically monthly, with a bank or financial institution. RDs are designed to encourage disciplined saving and earn interest over a fixed tenure. The interest rates are predetermined and generally lower than Fixed Deposits (FDs). RDs provide a lump sum at maturity, which includes the principal and accrued interest. They suit those with regular income who want to save small amounts systematically. However, premature withdrawal may attract penalties, and interest earnings are subject to taxation. RDs are relatively safer than some investments but offer moderate returns.
