What are recurring deposits (RD)?

A Recurring Deposit (RD) is a type of investment offered by banks and financial institutions where you deposit a fixed amount of money at regular intervals (usually monthly) for a predetermined tenure at a specified interest rate. Each deposit earns interest, which is compounded periodically (e.g., quarterly). At the end of the tenure, you receive the total maturity amount, which includes the principal deposits and the accumulated interest. An RD is an ideal savings option for individuals who want to invest small amounts systematically and earn steady returns.