POSTED BY Kirubhakaran Sundarrajan ON June 14, 2013 9:34 pm COMMENTS (6)

Hi all,


I m back with another silly question, certain banks are providing “insurance” with their recurring deposit schemes, (say, Siranjeevee RD). I need a logical answer to my question , ” why I should not proceed with this?”

I m 23 old, 1 yr completed in my career, so i m not aware of “mutual funds”, “stock”, “sip”, etc.. I dont want to start try my “half knowledge” with those “high risky products”. m

I would thank u very much, if somebody suggest quality books to understand and operate the above.


Thank u in advance…


6 replies on this article “RECURRING DEPOSIT + INSURANCE – “WHAT IS THE CATCH?””

  1. Dear K sunder, I checked the link & i think you are confusing no TDS with no Tax. Actually the interest is taxable here. the only thing is, it’s to be paid by you. Interestigly the insurance is also not free. the ins. prem. ‘ll be deudcted from your Rd interest & is available to tax benefit under regular limit of section 80C’s 1L Rs.



  2. Dear K sunder, Tax Saving on RDs? Now this one is quite interesting. Please share the detailed info. I think there is some mismatch in your understanding & the written wordings of the scheme.



    1. Kirubhakaran Sundarrajan says:

      Hi Ashal,

      here is the direct link to the site:

      Disclaimer: I am not promoting the above site/product


  3. Dear K sunder, Please explain in detaiol, how your question is silly? I want to know it’s sillyness. I did not found anything silly in it hence asking to increase my own knowledge.



    1. Kirubhakaran Sundarrajan says:

      hi Ashal,

      I was reading a lot of articles here abt the “insurance cum investment” policies, so called endowment plans. i know the return thru these policies is comparatively low to the other investments and also the sum assured is very low, So, i directly went for the term insurance and got it with ease for a good cover (70 L).
      Since i dont know abt mutual funds, demat, stock, shares, i need a alternative investment.
      If it is tax saving, it is an added advantage. So i searched online for low risk category and came across this recurring deposit scheme which offer 9% interest, sum assured = maturity value of rd during the rd period, & tax saving.
      case 1: whether this is better than the endowment policies, if it is better i might go 4 it
      case 2: i m just a fool, mixing up unrelated things.

      Thank u for replying Ashal…

  4. ‘Logical’ answer to your question involves questions to you:

    Do you have a dependent (wife or parents) now? You need insurance now only if you answer yes. If you are not married now and plan to get married two or three years from now then you should buy yourself a pure term life insurance with a sum insured equal to about 15 times your annual salary.

    There are many cheap online plans available. These banks insurance schemes will offer only a small sum as sum assured and will not cover your insurance need
    To find out how you need you could use

    So you could buy these bank groups insurances but they will not be sufficient for your dependent in most cases. best to get a online pure term insurance from Aviva or HDFC or others.

    Another question: Do you understand everything about a RD? For example how interest is calculated? Did you know that EVERY mutual fund which invests in stocks and is at least 10 years old has given good returns if someone has invested for 10 years?
    There will always be something more to learn about everything in the world. If you wait you are loosing a golden opportunity to create wealth due to the power of compounding.


    Jago Investor: Change Your Relationship with Money by Manish Chauhan and start investing in equity

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