Overview – How to become millionaire / Crorepathi by investing in a bank recurring deposits
Is it easy to become millionaire / Crorepathi without taking risk in investment? No investment in stock markets or in mutual funds, but can we attain this goal by investing in bank recurring deposits? Yes it is possible. Once you start investing on regular monthly basis for longer term in bank recurring deposits, your money grows faster. You would have heard about compound interest.
If you invest Rs 100 at 8% interest, for one year, your money would be Rs 108. In Second year, you earn interest of 8% on Rs 108 and not on Rs 100. This is called compound interest.
Your investment amount + interest would get re-invested each year (or Quarter) for longer term thereby benefitting through Compounding.
What are bank recurring deposits?
An investor can invest a fixed amount per month in bank recurring deposits for a specific period. The investment amount can be Rs 100 and with no upper limit. Currently Indian banks deposit rates are ranging between 8% to 9% on recurring deposits. Choose a bank recurring deposit which earns highest interest rates.
How to become millionaire / Crorepathi by investing in bank recurring deposits?
- Save Rs 1,600 per month: Are you aware that, if you save Rs 1,600 per month and invest in bank recurring deposit for 8.5% interest rate for 20 years, your money would grow more than Rs 10 lacs.
- Multiply above savings to 10 times i.e. Save Rs 16,000 per month and invest for 20 years at 8.5% interest rate, you would earn Rs 1 Crore? No risk, no second thoughts, just invest in bank recurring deposits and forget.
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When you want to become Crorepathi? See how much you need to save and invest in bank recurring deposit earning 8.5%.
- 10 years – You need to save Rs 53,500 to become Crorepathi
- 15 years – You need to save Rs 28,000 to become Crorepathi
- 20 years – You need to save Rs 16,000 to become Crorepathi
- 25 years – You need to save Rs.9,800 to become Crorepathi
- 30 years – You need to save Rs.6,100 to become Crorepathi
Conclusion: This is one of the best ways to become millionaire/Crorepathi. Start investing early in bank recurring deposits, as low as Rs 6,100 for 30 years @ 8.5% interest rate to become Crorepathi. Choosing a recurring deposit which offers highest interest rates would help you to reach your goal faster. Please refer my article on top bank deposit rates for maximising the returns. This is not a option for people who want to get rich quickly.
Readers, are you investing in bank recurring deposits? What is your experience?
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Suresh
Myinvestmentideas.com
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Hi suresh,
I need some financial planning tips from you.
I'm an engineer and working in gulf, my monthly saving is approx 1 to 1.2 lakh per month,
i want to invest money in such a ways that i can get an monthly income of around 40k to 50k,
my current age is 29, i want to achiev these target by the age of 35,
i do not have any current bank balance as i have finished home loan,
please guid me reaching my target .
regards,
Hitesh, If you want to get 50K per month after 6 years from now, you need a corpus of Rs 67 lakhs. For this investment, @ 9% bank interest, you would be able to achieve this target. You can invest in a combination of equity and debt for Rs 61,500 per month and easily achieve this target. This is what we educate our customers in our “paid services” section
Hi suresh,
Please let me know the charges for your paid service and how to get your service?
Regards,
Hitesh
Hi Hitesh, Currently I am not offering paid services. You can post your queries on this blog, I would provide maximum clarity and advice to you.
Hi Suresh, Please email me with details as I am very much intrested in fixed recurring deposits scheme.
Cheers
Raj, pls refer my email on latest FD rates and recurring deposit rates.
Is there any bank which lets you do RD for more than 10 years?
Kranthi, good question. Honestly, I do not have any answer. As per my knowledge banks do not offer RD, FD for more than 10 years as there are chances that interest rates would go down and they may need to pay higher rates.
Hi Suresh,
I have one doubt. If I will invest in FD for 5 year locking period then I will get tax benifit . But will the final amount received at matuarity will be taxable.
If yes then how to get that 10(10D) benifit also.
Regards,
Vishal Gupta
Vishal, Interest on Tax saving FD (5 years maturity) are taxable. However bank would deduct TDS as per applicable rates if it exceeds Rs 10,000. Benefit 10 (10d) you are talking about is pertaining to life insurance maturity receipt and not bank deposits.
Good article to explain the very basics of RD's. But I don't know of any banks in India providing tenures of more than 10 years. 10 year RD does not seem sensible. Taking your Crorepati example of 10 years, one would effectively pay 53500 * 12 * 10 = Rs. 64 lacs to get Rs. 1 crore in the end. i.e. 56% return in 10 years. Mutual funds would also give equal or better returns than this with tax saving options.
My friend heeral ,tds is not applicable on recurring deposit money ….
Rajesh, TDS is not deducted by banks. Agreed. But the tax needs to be paid by individuals based on their income tax slabs.
Dear suresh ,can I assume in this way in term of tds nd tax ! it better to go with ppf instead of recurring account as ppf seems to offer more advantage of not having tax on intrest amount earned on ….nd tds too….
Rajesh, I agree with you, that could be another option to become millionaire. Thanks. There are several things to be looked into. Regd PPF 1) Maximum is Rs 100,000 p.a.. 2) 15 years lock-in period 3) Liquidity issues. Regd RD, there are no such restrictions on the amount deposited.