How to Monitor and Adjust Your Recurring Deposit to Meet Changing Financial Needs

Saving money is essential for building wealth and achieving financial goals. One effective way to save is through a Recurring Deposit (RD) account. RDs offer a disciplined approach to saving, higher interest rates than regular savings accounts, flexible tenures ranging from 6 months to 10 years, and guaranteed returns.

In this blog post, we will explore how you can monitor and adjust your recurring deposit to meet your changing financial needs. 

How to Monitor Your Recurring Deposit 

Monitoring your recurring deposit is crucial to ensure that you stay on track with your savings goals and make any necessary adjustments along the way. Here are some key steps to effectively monitor your RD:

• Track Monthly Deposits: Keep a record of each monthly deposit you make into your recurring deposit account. This will help you stay organised and track your progress. 
• Monitor Interest Rates: Stay updated with the interest rates on your recurring deposit account. Interest rates may change over time, so it's important to review them periodically and understand how they impact your savings. 
• Calculate Your Returns: Regularly calculate the returns you are earning on your recurring deposit. Use the formula for compound interest to determine the total amount you will receive at the end of the tenure. 
• Review Tenure and Adjustments: Assess whether the tenure of your recurring deposit is aligned with your financial goals. If necessary, make adjustments to the tenure to ensure that you can meet your goals within a suitable time frame. 
• Track Changes in Financial Situation: Monitor any changes in your financial situation and adjust your monthly deposits accordingly. If you have additional funds available or need to reduce your savings temporarily, make appropriate changes to maintain financial stability. 

You can do all this and more with Ujjivan SFB’s mobile banking app or via Internet Banking. 

Adjusting Your Recurring Deposit 

Flexibility is one of the key benefits of recurring deposits. Here are some ways to adjust your RD as per your requirements: 

• Changing Monthly Deposits: If you find that you can save more or less than originally planned, consider adjusting your monthly deposits accordingly. Increasing or decreasing the amount can help you align your savings with changing financial goals and priorities. Please note that most banks don’t allow tweaking the investment amount once you have opened the account. You may need to close your existing RD and open a new account.
• Renewing and Extending Tenure: At the end of a recurring deposit tenure, you have the option to renew and extend the tenure. Evaluate your financial goals and decide whether you need to continue saving for a longer period or if it's time to use the accumulated funds. 
• Switching to Fixed Deposits: As your financial situation evolves, you may consider converting your recurring deposit into a fixed deposit. Fixed deposits offer higher interest rates and can provide better returns over a longer tenure.