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Why should I invest in Shriram Finance's recurring deposit?

Posted: 19th July, 2021

Updated: 2nd February, 2023

Written by -


Today, there is a lot of information on financial products and investment options available on the internet. While the awareness is good, at the same time, it also brings up the question, “where should you invest hard-earned money to earn huge profits?”

With the emergence of various investment options, namely mutual funds, stock market, and PPFs, the investor’s risk appetite has also increased. However, all eggs should not be put in the same basket. This means you must have a diverse investment portfolio to make good returns. High-risk and low-risk options should be balanced. RD investment plan is one of the popular and older low-risk investment options in Indian households. It comes with flexibility and assured moderate RD ROI, along with multiple other benefits.

One of the best places to open a recurring deposit account is Shriram Finance. They have years of experience providing finance with a vision of serving the unserved at the bottom of the pyramid. Shriram Finance aims to add value to the lives of the common people of the country through high-quality, low-cost, non-banking financial services. They have one of the best RD investment plans.

Here are some benefits of a recurring deposit with Shriram Finance:

  • Stable returns

Shriram Finance online Recurring Deposit comes with a high-interest rate of up to 8.50%* p.a. . It makes your income stable and builds your wealth by offering a guaranteed return on your investment. Since RD accounts can be opened with minimal fees, they are widely chosen and appreciated.

  • Useful in a cash crunch

When you invest with Shriram Finance, you will get a great opportunity to save some money for financial emergencies. The money can be withdrawn in situations where you need liquid currency. You can also avail of a loan against your RD at a lower interest rate to cover any unexpected expenses.

  • Tax saving

The amount you invest in an RD can be deducted from your taxable income, helping you save tax. This deduction can be up to Rs. 1.5 lakhs under Section 80C of the Income Tax Act. Interest earned on an RD is taxable, and under Section 80 TTB of the Income Tax Act for senior citizens, interest up to Rs. 50,000 is deductible.

  • Flexible tenures

Shriram Finance does not offer recurring deposits with higher interest rates but also offers tenure options ranging from 12 to 60 months. You can choose the duration you want and regularly invest in meeting your needs and financial goals.

  • Flexible payout options

Shriram Finance offers all customers flexible payout options. When creating your RD account, you get the option of an auto refund or conversion to a fixed deposit. That is why it is also known as the best Shriram Finance RD scheme.

  • Conversion to fixed deposits

When your RD matures and you don’t need the money immediately, you can convert your RD into a fixed deposit and reinvest the amount to gain additional benefits. Again, an e-receipt will be generated and sent to your registered email address. It is also one of the reasons for making recurring deposits with Shriram Finance.

  • Simple documentation

The documents required for opening an RD account are not difficult to arrange. All resident individuals can open an RD with a linked savings account. Once that account is opened, no further documentation is required. This is the simplest and most hassle-free way to save money and accumulate wealth with a guarantee.

  • Best for short-term goals

It is one of the best schemes to save for children’s yearly education expenses, furnishing and renovation costs for your existing home, saving for a dream overseas vacation, and marriage expenses.

  • Start with a minimum of Rs. 2,000/month

You do not have to save a lot of money every month to get a recurring deposit. One of the key advantages of an RD is that you can start with a minimum amount of Rs. 2,000 per month with Shriram Finance Union finance. Conversely, the maximum monthly installment for RDs can be 1 Crore.

Types of RDs Shriram Finance Union finance deals with:

  • Regular RD accounts:

A regular RD account can be opened by an Indian citizen above the age of 18 years. You can deposit a fixed sum in this account every month over the pre-selected period and earn a fixed interest rate on the deposit amount. Based on the tenure chosen by you, a straightforward or compound interest method will be used for interest calculations.

  • RD accounts for minors:

This account is primarily for people under the age of 18 years, which is why this account can only be opened under a parent’s or guardian’s supervision. Like a regular RD account, a deposit amount and tenure will be set at account opening, the returns being similar or a little higher than the regular RD accounts.

  • RD accounts for senior citizens:

There is a special RD account meant for senior citizens (above the age of 60 years) that can sometimes get the account holder additional interest on their RD compounded every quarter.

  • NRE/NRO RD accounts:

Non-resident External (NRE) and Non-resident Ordinary (NRO) RD accounts can be opened by non-resident Indians (NRIs), who can earn good interest and save every month through such accounts on income earned inside or outside India.

Important factors to consider before starting an RD account

While RD investments are safe and promising, there are a few things you need to consider before opening an account:

  • Interest rate

The interest rate offered on RDs differs from one organization to another. Mostly, the rate ranges between 3.5% and 8.50%* p.a. . The interest rate is directly affected by the duration of the RD account. A long-term deposit can fetch you slightly better returns than short-term ones.

  • Deposit term

There are three types of tenures available for RDs in general. First, short-term, lasting for 6–8 months. Second, medium-term, lasting for 5–10 years. And third, long-term, lasting for 10 years or more. Ensure that you choose an RD that suits your needs. The best way to select an RD is to see which financial institution offers the best interest rate at the shortest tenure.

  • Premature withdrawal facility

When you open an RD account with any financial institution, you also get an option of premature withdrawals; this option is available so that you never become cashless, no matter what the situation is. Generally, institutions levy a charge on premature withdrawals, but this charge differs from company to company.

In addition, the interest payable is calculated depending on how long the funds were held in your account. Therefore, go for an institution that charges a lower premature withdrawal fee while offering a higher interest rate.

Final thoughts

An RD has many benefits that allow it to be at the top of the best low-risk investment options. The returns, as well as a saving habit, are guaranteed. RDs serve all age groups with a fixed return, no matter what the market fluctuations are during the tenure.While the interest rates can vary according to tenures, you can avail of up to 8.50%* p.a. with Shriram Finance.

RD investment plan helps you build a savings habit and offer good returns to beat inflation rates.To know more about Shriram Finance’s recurring deposit, please reach out to us.

What is the Recurring Deposit Scheme offered by Shriram Finance?
What is the Recurring Deposit Scheme offered by Shriram Finance?
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Who Should Consider Investing in a Recurring Deposit?