Let us discuss about Recurring deposit.
Recurring deposit schemes pay you a higher interest rate than the Savings account. Generally it will be higher by at least 2% or so. I have not enquired about the interest rates in every bank but I am sure it will be higher than 8%. You must be wondering why Recurring account interest rates must be higher than Savings account. This is due to the fact that Recurring account demands you to deposit the amount you agreed every month till the time you have agreed upon and you can’t withdraw the amount till the agreed time period ends. If you defer paying then fine will be charged. Generally it is the bank that decides the minimum amount that is required to be paid and mostly time period is minimum one year. There are several banks that provide this facility.
I don’t advise married people to go in for this because financial commitments might crop up every now and then and it is very hard to be attached to it. We can’t have a very strict regime, we prefer to have some relaxations but if you are single then this is the best way to start your savings habit. It forces you to pay and make sure that it is ECS (Electronic Clearing Scheme) and it should be deducted on the day of your salary (for safer side).
You start this way and I am sure by the end of the year you will thank me for doing it.
Hope you plan up your financial future.