If you have thought about investing in a safer option instead of investing in stocks, a cash certificate is a go-to option for you. Cash certificates and recurring deposits are similar and types of services are provided by the Indian Banks. You should know that these types of investments are not related to stock markets but provide good returns. Let us learn the cash certificate meaning now.
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What is cash certificate in banking?Cash certificates are a type of deposit purchased after giving a certain amount of money. The account holder pays a certain amount of money and receives the cash certificate. So, the account holder builds up the full amount of the certificate and earns interest for some years. The cash certificate works like a reverse loan. Cash certificates can last up to years and an account holder can even borrow some loan against a cash certificate if required.
Cash certificates and recurring deposits are very similar. The only difference is that a cash certificate is more flexible than recurring deposits in terms of getting loans.
An individual can invest in cash certificates as long as they want. The longer you invest the more returns you will receive. If you invest for a year or two you will get lower interest rates than those that last for five years or more.
This was all about cash certificate meaning. I hope you find this informative.
Read more:
What Is Recurring Deposit?
When TDS is deducted on FD?
How to calculate interest on FD?
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What is cash certificate in banking?
Anamika
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2 Year
2022-09-04T23:59:17+00:00 2022-09-04T23:59:18+00:00Comment
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