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How Does A Flexible Recurring Deposit Work?

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Deposit

Not all of us can put bulk amounts into our investments, can we? But why is that? That is because the majority of us have a corporate job or a day job and get paid on a monthly basis – which means a little money every month.

For instance, if you want to invest Rs. 5,00,000 lakhs in a fixed deposit, your monthly salary is Rs. 50,000. How are you going to make it to fund the fixed deposit? Well, even if you save Rs. 10,000 each month, you would have to wait months in order to invest that in an FD. That is a long time to wait for your monthly to grow in any possible way.

But is there another way you could work this out? Fortunately, to your luck, there is. You can invest that Rs. 10,000 in a recurring deposit. Wait, wondering what a recurring deposit is.

Here we are – to explain it all.

What is the Meaning of a Recurring Deposit Account?

The recurring deposit account is a type of bank or post office account where a depositor makes regular monthly deposits of a predetermined amount of money (generally ranging from one year to five years). This format is intended for the persons who want to make a fixed monthly payment with the intention of receiving a lump sum after a few years.

The Recurring Deposit plan’s tiny monthly contributions allow the user to accumulate a sizable amount at maturity. This type of deposit scheme’s interest rate is calculable on a quarterly compounded basis.

An ordinary fixed deposit assures that a person allows money and can withdraw this amount within a specific time frame. You are unable to touch the amount of money or perhaps add to it in the interim. The repeating deposit follows a similar procedure. The primary difference in this type of program is that each month, instead of making a large deposit, you should deposit a specific amount into your account that you chose when you opened your RD account. 

This sum can be negligible and won’t leave a big hole in your wallet. And when the loan matures, you will have a sizable surplus over the principal plus interest.

Want an RD Account? Here’s How to Have One

You can start a Recurring Deposit account by going to any bank or post office, filling up the necessary paperwork, and paying the first month’s payment together with other required documents, such as a PAN card and evidence of residency.

A recurring deposit can be opened for as little as six months or in increments of 3 months, with a maximum term of 10 years. The interest rates offered for recurring deposits are similar to those offered for fixed deposits. Similar to India Post, an additional 0.5% rate of interest is given to older citizens, and some banks additionally offer a grace period of roughly five days.

Although have you heard about the flexible recurring deposit? If you have not, this is the right place to get to know it.

What is a Flexible Recurring Deposit Account?

Depositors can invest lump sums as and when they become available with a Flexi Recurring Deposit, which gives simplicity and total flexibility. A Flexi RD has two parts: the flexible amount, which can vary with each monthly installment depending on the available money, and the core amount, which is the amount that the account holder contributes when the RD is opened. For a specific tenure, a core amount must be used to open each Flexi Recurring Deposit. 

Depending on the bank where the RD is being held, this sum varies. With a cap on the amount to be invested, the variable portion of the recurring contribution can be increased in certain multiples.

While the flexible portion has an interest rate that is effective as of the deposit date, the core amount is subject to the relevant rates for the duration of the recurring deposit. The essential amount must be deposited by the deadline in order to avoid a fine from the bank. 

No penalties will be assessed if the flexible amount is invested at any point throughout the month. Flexi Recurring Deposit plans do not incur early closure fees and can be closed at any time.

Some of the Famous Flexible RD Accounts

There are renowned banks out there that are willing to offer you this, and they are:

a) ICICI Bank ( iWish Flexi RD Plan)

One of the finest yields is provided by the ICICI Bank’s iWish Flexible Recurring Deposit, which has interest rates between 7.00% and 7.50% for terms ranging from 6 months to 10 years. Customers are not required to make deposits every month and may deposit any amount at any time during the term. Several deposits may be made in a single month. For iWish accounts canceled before the duration is up, ICICI Bank does not impose a pre-closure penalty. 

When opening an iWish flexible RD account, customers can establish a goal amount and choose how much they should deposit each month to get there. To raise the necessary funds, family members and friends can make contributions.

b) Punjab National Bank (Swecha Jama Yojna)

The PnbSwechha Jama Yojna scheme requires a minimum deposit of Rs. 100 and can be applied for by a single applicant or as a joint account. Depositors have tenure options ranging from 6 months to 120 months. PNB stipulates that the monthly sum must not exceed ten times the core sum. Customers are not subject to any fees for late deposits or early termination of recurring deposits. 

Under the supervision of a guardian, minors are also permitted to open a Flexi RD account through the PnbSwechha Jama Yojna. On a PnbSwechha Jama Yojna account that already exists, PNB also grants loans or overdrafts.

c) State Bank of India (Flexi Deposit Plan)

With the SBI Flexi Deposit program, a client has the freedom to select the annual deposit amount. This sum must be within the bank’s established minimum and maximum limitations. The deposit amount can be increased by multiples of Rs. 500 up to a maximum of Rs. 50,000. The minimum deposit amount is Rs. 5000. Customers are permitted to deposit any number of times during the year. A fee of Rs. Fifty will be assessed by SBI if there is any payment default. The deposit tenure might range from 5 years to up to 7 years, and the interest rate offered will be compounded on a quarterly basis.

Debits from savings accounts, current accounts, and other designated accounts can be used to pay for an SBI Flexi Deposit. The SBI Flexi Deposit scheme offers advantageous interest rates to senior folks as well.

Conclusion

This is literally – just the tip of the iceberg. But, you would like to know that there are a lot more banks that are willing to offer you this scheme – and you would have to enjoy it.

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India News

Why Hindenburg Research is shutting down: A personal note from the founder

Anderson emphasised that his choice was not prompted by any single factor. There are no external threats, health concerns, or urgent issues necessitating this decision. Instead, he described it as a natural conclusion to a significant chapter in his life.

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Nate Anderson, the founder of Hindenburg Research, has decided to shut down his short-selling venture, which has famously exposed alleged frauds amounting to billions and sent shockwaves through major corporations. From igniting a $150 billion crisis for the Adani Group to taking down giants like Nikola and Eros International, Hindenburg has become synonymous with financial scrutiny and controversy depending on one’s perspective.

In a comprehensive blog post titled “Personal Note From Our Founder,” Anderson revealed his decision, stating that the firm has fulfilled its mission and that it is time to move forward. “As I’ve shared with family, friends, and our team since late last year, I have made the decision to disband Hindenburg Research,” he wrote.

Anderson emphasised that his choice was not prompted by any single factor. There are no external threats, health concerns, or urgent issues necessitating this decision. Instead, he described it as a natural conclusion to a significant chapter in his life.

This announcement follows Hindenburg’s completion of its final investigations into alleged financial fraud, which have been submitted to regulators. “As of the last Ponzi cases we just completed and are sharing with regulators, that day is today,” Anderson noted.

Reflecting on his career, he acknowledged that his intense dedication to the firm had come at the expense of other life areas. Initially motivated by a desire to prove himself, he ultimately began to view Hindenburg Research as just one of many chapters in his life.

In the upcoming six months, Anderson plans to create and share content, including materials and videos, to transparently illustrate the firm’s investigative techniques. He hopes this will inspire others to pursue similar efforts.

Hindenburg Research operated with a small but committed team of 11 members. Anderson praised their dedication to precise, evidence-based reporting and their courage in uncovering financial fraud. His team’s efforts have significantly influenced the landscape of financial accountability, with nearly 100 individuals facing civil or criminal charges partially attributable to their investigations.

“Nearly 100 individuals have been charged civilly or criminally by regulators, at least in part due to our work, including billionaires and oligarchs. We shook some empires that we felt needed shaking,” Anderson stated.

Hindenburg garnered international attention in January 2023 when it published a report alleging fraud and stock manipulation by the Adani Group. This report triggered a massive selloff in Adani’s stock, erasing over $100 billion from Gautam Adani’s personal wealth and causing the market capitalization of 10 Adani Group companies to plummet from ₹19.19 lakh crore on January 24, 2023, to below ₹7 lakh crore by February 27.

Although Adani stocks eventually recovered, the Supreme Court later noted that allegations made by organizations like Hindenburg, without proper verification, cannot be considered valid evidence. Previously, Hindenburg’s investigations included exposing Nikola Corporation in 2020 for fraud, which resulted in the resignation of founder Trevor Milton.

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India News

Sensex sheds 1,049 points, Nifty drops below 23,100

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Sensex falls 1,049 points, Nifty slips below 23,100 amid market downturn

The Indian stock market faced another day of sharp declines on January 13, as bearish sentiments tightened their grip for the fourth consecutive session. Weak global cues, a surge in crude oil prices to a three-month high, and reduced expectations of a U.S. rate cut in 2025 contributed to the downward spiral.

At the close of trading, the Sensex plunged 1,048.90 points or 1.36% to settle at 76,330.01. The Nifty also fell significantly, shedding 345.55 points or 1.47% to close at 23,085.95.

Sectoral impact

All sectoral indices ended the session in the red. The realty index was the worst hit, slumping by 6.7%. Other sectors, including oil & gas, power, PSU, metal, and media, recorded losses in the range of 3-4%.

This broad-based sell-off saw investors’ wealth take a major hit. The market capitalization of BSE-listed companies dropped sharply by Rs 12.39 lakh crore, falling to Rs 417.28 lakh crore from Rs 429.67 lakh crore in the previous session.

Key drivers of the decline

Crude oil prices: Crude oil surged to a three-month high, stoking fears of inflationary pressures and higher input costs across industries.

Global market trends: Weak global markets added to investor apprehensions, as global indices reflected a cautious outlook amid economic uncertainties.

Interest rate concerns: Revised expectations that the U.S. Federal Reserve may delay rate cuts in 2025 also weighed on investor sentiment.

Outlook

Market experts suggest that volatility may persist in the near term as global and domestic factors continue to influence investor behavior. A focus on corporate earnings reports and international economic trends will be critical in shaping market movements in the weeks ahead.

With a significant erosion in investor wealth, market participants remain cautious as they navigate the ongoing uncertainties.

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Latest business news

Pune entrepreneur asks Blinkit CEO to launch ATM service after Ambulance, sparks debate

It’s worth mentioning that similar services are already available, such as platforms like MakeMyTrip that offer foreign currency delivery.

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Days after Blinkit launched its 10-minute ambulance service, a start-up founder and YouTuber reached out to Blinkit CEO Albinder Dhindsa with a request to introduce an “ATM-like” service. The founder suggested that this service would be “incredibly helpful.”

Harsh Punjabi, founder of The Dot Company and a YouTuber, posted on social media platform X: “Hey @albinder, please start an ATM-like service on Blinkit. Users could pay via UPI, and cash could be delivered to their doorstep in under 10 minutes. That would be super helpful!”

His rationale for this suggestion became clear in a follow-up tweet where he expressed, “Leaving for a trip and need cash. I only have Rs 100 at home. I don’t want to go to the ATM, but it looks like I’ll have to.”

Punjabi’s tweet sparked a variety of responses. Some users pointed out that delivery charges would incur an 18 percent GST, while others claimed that the idea would make Indians lazier. Many questioned the need for cash, given the widespread acceptance of UPI.

One user remarked, “The idea is good, but the 18 percent GST on delivery charges would ruin everything,” while another joked, “This scheme should be kept a secret.”

Another user lamented, “Why doesn’t Blinkit breathe on our behalf too? We’ve become that lazy,” and another added humorously, “Please, let’s not make India lazy to this extent.”

A user highlighted that similar arrangements exist where customers go to shops, pay extra for their bills, and take back the additional cash for tasks like paying rickshaw pullers.

“Why do you want cash? Cash should be eliminated. We need maximum digitalization,” one user opined, while another noted that acquiring smaller notes can be tricky, especially when UPI isn’t an option.

It’s worth mentioning that similar services are already available, such as platforms like MakeMyTrip that offer foreign currency delivery.

On January 2, Blinkit announced its ambulance service. Dhindsa stated, “We are taking our first step toward addressing the challenge of providing quick and reliable ambulance services in our cities. The first five ambulances will be operational in Gurugram starting today. As we expand, users will soon have the option to book a Basic Life Support (BLS) ambulance through the Blinkit app.”

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