Many of us want to own the latest gadgets. We see the advertisement for a new iPhone or an iPad or other gadgets and we want it. Many times, in this mad rush to buy things, logic goes out of the window. If you actually need the gadget or not can be a different article, in this article, we tell you the right way to go about in buying a gadget.
There is a simple way. Well – just open a recurring deposit. A recurring account is an account in which you have to deposit a particular amount every month for a set period of time. Everything is decided by you except the interest rate(obviously!). A recurring deposit gives a higher interest rate than savings account and is not like a fixed deposit where you will need a large sum amount of money. In recurring account, you can save a certain sum of money every month. And as a result, it can help you to fulfil your short term goals such as purchasing new gadgets. Here’s how a recurring account can help you to save to purchase new gadgets:
The higher interest rate is extremely competitive and the bank grants you a fixed interest rate for a recurring deposit. Interest rate is the rate that banks will pay you for depositing your money in the bank. Most banks have generally the same interest rate, however, some give slightly higher interest rate than others. This is one of the main reasons why people choose to save their money in a recurring deposit account as the interest rate is much higher than a savings account.
Paying a fixed amount every month is also a feature of a recurring deposit account where the individual who holds a recurring deposit chooses to pay a certain amount. The minimum amount which can be paid is Rs. 10. This inculcates a saving habit and it allows you to put aside any amount you decided every month. For example, if you are earning Rs. 30,000 and you choose to set aside Rs. 7,000 every month, it is enough to purchase a phone or laptop in 4 months. What some people fail to understand is the important of saving even a small percentage of their salary can make a big difference.
Withdrawing your money before your tenure ends might seem tempting. However, if you have your mind set to something you want to buy and you are keen in seeing it through a recurring deposit will allow you to buy that product as your money is locked in for a small period of time. If you choose to have a fixed deposit for a shorter period of time then the interest rate is not high. This is why buying the latest gadget is possible if you choose to invest your money in a recurring deposit.
Tenure is known as the duration in which you choose to lock the amount in for. This can be long term or it can be short term. This is entirely depended on the individual who chooses to deposit the money. This is decided on when you want to own the product and accordingly save a certain sum of money per month and not the other way around. For example, if you wish to buy an iPhone or another gadget which costs Rs. 80,000. You may choose to save Rs. 10,000 every month for the next 8 years.
In conclusion, a recurring deposit can really help you to purchase a new gadget because of the various features of RD. A recurring deposit is better than a savings account because a recurring account has a much higher interest rate. This can help you to fulfill your financial goal of purchasing a new gadget.
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