Setting financial goals is important for ensuring a secure and prosperous future. Whether you dream of buying a home, funding your child's education, or planning for a comfortable retirement, having clear monetary goals can guide your savings strategy. One effective way to achieve your targets is through Recurring Deposits (RD).
Define your financial goals
The first step to achieving your financial goals with RD is to define them clearly. Categorise your goals into short-term, medium-term, and long-term objectives by defining the tenure:
- Short-term goals: Saving for a vacation, purchasing a gadget, or building an emergency fund.
- Medium-term goals: Buying a car, funding higher education, or planning a wedding.
- Long-term goals: Purchasing a home, retirement planning, or creating a corpus for your child's future.
Determine the amount to save
Calculate how much you need to save to achieve each goal. Break down the total amount into manageable monthly deposits, considering the interest rate.
- Short-term goal: For example, you need to save about ₹1.5 lakh for a vacation in two years. Assuming an RD interest rate of 7.1% per annum, you need to save approximately ₹5,800 per month.
- Medium-term goal: Accumulate over ₹5 lakhs for your child's education in five years. With the interest rate of 7% per annum, you need to save around ₹7,000 per month.
- Long-term goal: Gather ₹50 lakhs for retirement in 15 years. You would need to save approximately Rs 29,000 per month assuming interest rate of 7% per annum.
Benefits of Recurring Deposits
- Guaranteed returns: Unlike market-linked investments, RDs offer assured returns. The interest rate is fixed at the time of opening the RD account, ensuring predictable growth.
- Flexibility: You can choose the deposit amount and tenure as per your convenience. This flexibility allows you to align your savings with your financial goals.
- Low risk: RDs are a safe investment option as they are not subject to market fluctuations. Your principal and interest are secure.
- Ease of access: RD accounts can be easily opened online or at your nearest bank branch. Many banks, including Axis Bank, offer the convenience of auto-debit from your Savings Account, ensuring you never miss a deposit.
Also Read: Everything you need to know about tax on Recurring Deposit
Conclusion
Setting financial goals is the first step you need to take to achieve financial security and success. Recurring Deposits offer a reliable and disciplined way to save money and meet your financial objectives.
Axis Bank's Recurring Deposit is an excellent tool to help you achieve your financial goals and dreams. With features like a minimum investment of just ₹500, flexible tenures ranging from 6 months to 10 years, and the convenience of auto-debit and online access, Axis Bank makes it easy to save regularly and grow your savings efficiently.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
