What is the Difference between Recurring Deposit, Term Deposit, Fixed Deposit
There are different terms like fixed deposit; term deposit and recurring deposit that are frequently used in our society. These terms are in fact, used for bank related work. They are different from each other in many respects. Let’s have a look on difference between them.
Recurring Deposit
It is a type of term deposit offered by the banks. A user of recurring account deposits a fixed amount in his account every month and earns a fixed interest. This account is for people having regular income. It allows the customer to save money through regular monthly deposit and build their savings.
Term Deposit
It is also known as time deposit in Australia, New Zealand and Canada. In united kingdom a bond. It is types of deposit in which deposited money cannot be withdraw before a certain fixed time or term. If a person wants to withdraw his deposit before the end of term, than he have to pay some penalty.
Fixed Deposit
It is most popular form of term deposit. It has a high interest rate as compare to saving accounts. In fixed deposit, interest is higher if the term of deposit is higher. The longest term is 10 years in fixed deposits.
Recurring Deposit vs Term Deposit vs Fixed Deposit
The difference between recurring deposit and term deposit is, recurring deposit offers it customers to deposit a fixed amount in their accounts on monthly bases and earn an interest on their deposit. While in a term deposit or time deposit, you cannot withdraw any amount before the end of term. If you want to do so, you have to pay penalty for this. Difference between fixed deposit and term deposit is, in fixed deposit longer the deposit term will longer the rate of interest. Term deposit has low rate of interest as compare to fixed deposit. Term deposits are also repayable after expiry of term.
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