This blog covering about Recurring Deposit (RD) & Fixed Deposit (FD) and answers to some of the top questions about these 2 investment instruments.

What is Recurring Deposit (RD) & Fixed Deposit (FD)?

RD & FD is two return guaranteed fixed-income investments. Both will have a fixed maturity period. The interest rate of both RD & FD is known upfront and it remains unchanged until the maturity period of the deposit. Interest rates will vary from year to year.

The interest rates offered on fixed deposit (FD) and Recurring deposit (RD) mostly the same.RD & FD schemes often offer only modest returns compare to other market-linked investment schemes.

What is FD?

A fixed deposit (FD) is a financial instrument, which provided by Banks or Non-Banking Financial Companies. In FD a fixed amount needs to deposit in banks or NBFC for a fixed period of time.FD offers a higher rate of interest than savings account to the account holders. Interest remains unchanged until the maturity date.

What is RD?

Recurring deposit (RD) is a financial instrument alternative to fixed deposits for investors. In a recurring deposit, investors have to deposit a certain amount every month for a determined fixed tenure.

What is the difference between FD and RD?

• In Fixed Deposit (FD), the Fixed amount is deposited for a fixed period of time,  Whereas, in Recurring Deposits, the customer deposits fixed amounts in regular intervals for a fixed period of time. 
• The maturity amount with interest will be higher for FD than RD for a fixed period of time.
• RD helps to develop the habit of saving on a regular basis, whereas FD help to develop the habit of saving the amount for a fixed period of time.
• A fixed deposit provides interest on the deposited amount, whereas for RD interest will add on the monthly basis.

Which is better RD or FD?

FD will have a higher interest amount earned than RD. In the view of investment, in RD investors do not need to invest a lump sum amount at one time, but in FD need to do a lump sum investment. Investing in an RD is a good option for salaried person and FD is good for those how to have a lump sum amount in hand.

Can withdraw money from the RD account before maturity?

The withdrawal is permitted only if the RD is operational for a minimum of 1 year, in that 12 monthly deposits required. Withdrawal is permitted for one time with a cap of a maximum of 50% of the deposits before the maturity period. RD can stop any time with a penalty of deduction of one month of interest earned.

What happens if the RD installment is not paid?

Non-payment of a monthly installment leads to a default fee of 1% default amount, this rule very time to time and bank to bank. If there is a default amount, the depositor has to first pay the default fee and then pay the current month’s deposit to continue the RD.

Can we change the RD amount?

Once started the RD account, the term and deposit amount cannot be changed. Currently, only a monthly deposit payment option is available that also can’t be changed once it started.

Is RD and FD account Tax-free?

The interest earned on FDs and RDs throughout a financial year is taxed. Tax will be deducted at source (TDS) when it is credited to linked savings or current account. If we don’t want the bank to deduct the TDS, we can make a request to the bank. Tax deducted can clam back during the return filing if income is lesser than the tax threshold.

Is Post Office RD safe?

Post office saving schemes and bank Recurring deposits are safe and we can easily open, as it is government-backed schemes and also it offers assured returns.

Conclusion:

Both RD and FD are very easy to start and gives a good amount of returns. It can be opened through any bank or with NBFC. Both are the safest investment instruments and gives guaranteed returns to the investors. Depending on the investor’s convenience they can choose any of these financial instruments for their wealth creation.

Thanks & Regards

Harry

Below are the 8 types of charts that help for technical analysis for newcomers into the share market. Basic about all chart is, X-axis displays the stock price or volume of trade, and Y-axis shows the time period. There are mainly 8 charts commonly used by traders for technical analysis. However, the 2 types of charts that are the most commonly used and easy to understand, are the line chart, and candlestick chart.

 1. LINE CHART

 The line chart is the most basic type of chart used in the share market. It is a graphical representation of the current market price on the X-axis against the time on the Y-axis. It is formed by connecting the series of data points ( Market price) with a continuous line.

Line chart image

• Each point in the chart indicate the current price at that particular
• Line chart helps to locate easily major support and resistance levels in the price movements.
• Line chart helps us to draw trend lines and easy to understand and follow for newcomers.
• Building strategies using a line chart is difficult as it does not provide accurate details like open, high, and low prices for a particular time frame.

 2. CANDLESTICK CHART

A candlestick chart describes price movements of a security and derivative over a time period. Candlestick is also called the Japanese candlestick chart. Candlestick shows the opening, closing, and high and low in a particular trade time frame I.e. 5 minutes, one day, or one-month… If it is a 1-month chart, it shows about 20 trading days as each of 20 candlesticks in the chart.

candlestick chart

• If the chart is green, it shows bullish ( Price goes up in a particular time frame) else bearish trend.
• For a bullish candle, the left bottom corner point of the body is the opening price and the right top corner is the closing price. For a bearish opening, price indicates on the left top corner and closing on the right bottom corner of the body.
• The highest point of the candlestick indicates the high price and the lower endpoint of the bottom stick of the candle indicates the lower price in the selected time frame.

3. BAR CHART

 Bar charts are one of the easy charts to follow which consist of an opening foot, which facing left of the central vertical line, a vertical line at center showing high and low in a time frame, and a closing foot, which facing right of the vertical line. A bar chart shows the high, low, open, and close prices for a defined period of time and it can be colored coded.

Bar charts

• The vertical line in the middle of the price bar represents the high price and low prices for a particular period.
• The left horizontal lines which called opening feet which indicate the opening price in the time frame.
• The right horizontal lines which called closing foot represent the closing

4. COLOURED BAR CHART

 Coloured Bar charts Similar to Candlestick chart which consist of the body showing the opening point and closing point and central vertical line showing high and low for a specified time. The difference is each candle will be coloured in a different colour which indicated below.

Coloured Bar charts

• The red candle bar indicates a downtrend for a particular time period.
• A green candle bar indicates an uptrend for a particular time period.
• White candle bar indicates open and close price almost the same within a particular time period.  

5. HOLLOW CANDLESTICKS

 Hollow candlestick is similar to Candlestick chart which consists of the body showing the opening point and closing point and central vertical line showing high and low for a specified time and hollow and fills indicate the movement of the price as below.

Hollow candlestick

• The hollow candlesticks indicate price moved higher after its open (Bullish).
• A filled candlestick indicates that the price moved lower after the open (Bearish).
• The black-filled candlestick is the opposite of a normal hollow candlestick, which indicates, even though the closing price was above the previous closing price, current prices moved lower after the opening price in a stipulated time frame.

6. MOUNTAIN CHARTS

Mountain charts, also known as area charts, which is similar to the line chart. The only difference is space under the line chart is shaded. They line chart and the mountain chart look exactly the same. The peaks and dips in the chart make it look like a mountain.

Mountain charts

• Mountain charts are useful to quickly grasp pricing position information over a long period of time frame.

7. BASELINE CANDLES

Baseline candles are a combination of candle chart and mountain chart with a base reference a strength line from left to right. The baseline is set to indicate the opening price of the market day.

Baseline candles

• The portion above the baseline indicates bullish and below is bearish.
• When the open is lower than the close(Bullish), the area below the candles up to the baseline is shaded green.
• When the open is higher than the close (Bearish), the area above the candle,  up to the base line is shaded in red.

8. VOLUME CANDLESTICK

Volume candlestick is similar to a candlestick with the additional feature of volume representation in it. Volume is represented on the base of the width of each candle. In Volume candlestick, chart trade volume is plotted at the bottom of the chart as rectangles. The height of each rectangle represents the volume.

Volume candlestick

• If the trading volume is higher, wider will be the candlestick body.
• Low-volume days result in skinny candlesticks.
• A red volume bar indicated bearishly and a green bar indicate bullishly.

Conclusion:

All the above 8 charts are essential to understand for the newcomers to the share market. In technical analysis these charts moke a big role to understand the performance of the stock for a stipulated time frame.  This technical analysis will help the investors and traders to take a decision on the entry position of each stock.

Open free Demat and Trading Account uses the following links with respective brokers.

UPSTOX ACCOUNT OPENING LINK :

https://upstox.com/open-demat-account/?f=EV

ANGEL BROKER. 

https://itrade.angelbroking.com/

Or please use referral code as ” HYYEP ” For

Opening DRA ( Digital referral Associate) Account please contact me, so that I can refer. Easy & 100% Digital ( Online ) Account Opening in 5-10 minutes.

ICICI Direct 

https://secure.icicidirect.com/customer/accountopening?rfrlcode=8504558393

Documents required: PAN and Cancelled check / Bank account statement copy for uploading. 

In this blog, we are sharing the 10 ways to make a profit from the share market. This blog is designed for newcomers to the share market and trading. We can divide the 10 ways into 2 categories, first categories are an investment, which means buying the stock and holding for a long time with the hope of an increase in the capital value and the second method is trading, which means buying and selling of the shares in a short time, without taking the delivery of the stock to our Demat account.

Let get started with different ways to make the money.

 Investment

First, we can see the 5 months of money-making through investments in the share market.

1. Capital appreciation :

Capital appreciation is of 2 types Long term and Short term. If appreciation happens in less than 1 year it is a short team capital gain and else it is long-term.

• It is an increase in the price or value of assets.

It may refer to the appreciation of company stocks or bonds held by an investor, an increase in land valuation, or other upward revaluation of fixed assets.

2. Dividend

A dividend is a profit distribution payment made by a corporation to its shareholders.

• Divided will payout yearly or quarterly as per the company policy and it will directly be credited to the linked bank account.
• Some companies provide the dividend to their shareholders a higher amount than a bank deposit interest rate.

3. Bonus Share & Stock split

•  A stock split is the same share divided into two or more shares as per the ratio
• A bonus issue is an additional share that is given to the existing shareholders.

4. IPO

 The initial public offering is a process in which shares of a company are sold to institutional investors and to retail investors. An IPO is underwritten by an investment bank, to be listed on one or more stock exchanges.

5. Buyback

• Stock buybacks refer to the repurchasing of shares of stock by the company that issued them.

A buyback occurs when the issuing company pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors.

Trading

Now, we can see the next 5 months of money-making through trading in the share market.

6. Intraday trading

Intraday trading deals with the buying and selling of stocks on the same day, during the trading hours that are stipulated by the exchange. Stocks are bought and sold in large numbers strategically with the intention of booking profits in a day.

7. BTST

 BTST (Buy Today, Sell Tomorrow) is a facility that allows customers to sell shares before they are credited into a Demat account or take the delivery of shares. The decision has to be made in 2 days.

8. Short sell Trading.

 A short sell is a transaction in which the seller first sells the stock he does not actually own and borrows it later on the same day. In reality, we can execute the short sell order through broker /dealer only and the seller has the obligation to buy back the stock at some point in the same day/future. Short sales are margin transactions.

9. Swing trading & Position trading 

 Swing trading is a style of trading that attempts to capture gains in a stock over a period of a few days.

Swing traders primarily use technical analysis to look for trading opportunities. Upward and downward “swings” in the price of a security help the trader to book a  lot of small wins that help to make a significant return.

• The difference between position trading and swing trading is the amount of time involved between buying a stock and selling it.

10. Futures and options

•  A future is a right and an obligation to buy or sell an underlying stock at a predetermined price and deliverable at a predetermined time. 
• Options are a right without an obligation to buy or sell equity or index.

A call option is a right to buy while a put option is a right to sell.

Futures contracts have the buyer obligated to honor the contract, whereas, in the options contracts, there is no obligation on the buyer to buy or sell.

Conclusion:

The above mentioned are the 10 ways to make the money from the share market domain. If you would like to share any further ways, please comment on the comment line for the reference of other readers.

Before start investment and trading, it is advisable to understand the concepts in the share market and trading. Once we understand it will be easy for everyone to start trading and make money from the share market.

Open Demat Account

Open free Demat and Trading Account uses the following links with respective brokers.

UPSTOX ACCOUNT OPENING LINK :

https://upstox.com/open-demat-account/?f=EV

ANGEL BROKER. 

https://itrade.angelbroking.com/

Or please use referral code as ” HYYEP ” For

Opening DRA ( Digital referral Associate) Account please contact me, so that I can refer. Easy & 100% Digital ( Online ) Account Opening in 5-10 minutes.

Documents required: PAN and Cancelled check / Bank account statement copy for uploading.