Recurring Deposit

Recurring deposit account is opened by those who want to save certain amount of money regularly for a certain period of time and earn a higher interest rate. In recurring deposit account a fixed amount is deposited every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.

The period of deposit is minimum six months and maximum ten years. The interest rates vary for different plans based on the amount one saves and the period of time and also on banks. No withdrawals are allowed from the recurring deposit account. However, the bank may allow to close the account before the maturity period.

These accounts can be opened in single or joint names. Banks are also providing the Nomination facility to the recurring deposit account holders. 

Features of Recurring Deposit Account

• Recurring Deposit schemes are effective in inculcating a regular habit of money saving
• The minimum period of deposit starts from 6 months and may extend to the maximum period of 10 years
• Recurring Deposit interest rates are equal to that offered on a Fixed Deposit, which is generally higher than any other savings scheme offered by banks.
• Recurring Deposit accounts do not allow premature withdrawals. However, the bank may allow closing the account before the maturity period with a penalty for premature withdrawal
• Recurring Deposit can be funded periodically directly from your savings or current account through standing instructions (SI) given to the bank by you
• The minimum amount that can be deposited in RD accounts may start from an amount as small as Rs.10. The minimum amount defers from bank to bank