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  • Advantages of Investing in Recurring Deposits

    Recurring Deposit is one of the most preferred investment schemes available in India. Risk averse investors looking for a promising investment scheme with good returns choose Recurring Deposit because it is simple and is a straightforward financial product. Read on to find more about the advantages of investing in a Recurring Deposit scheme in India.

    What is a Recurring Deposit and How Does It Work?

    In a recurring deposit scheme, the investor deposits a set amount every month over a predefined tenure which generally varies between one year to five years. The recurring deposit scheme has one major differentiating point when compared to fixed deposits - in a fixed deposit scheme, the investor has to deposit a lump sum once and leave it untouched for a period of time. So, people who do not have a lump sum or people who are looking to invest a set amount every month usually prefer Recurring Deposits. The principal amount deposited is returned at the end of tenure along with the interest. Normally, the interest is calculated on a quarterly compounding basis for recurring deposits.

    How to Open a Recurring Deposit?

    All major private and public banks in India offer Recurring Deposit products for their customers. Also, India Post offers a very popular recurring deposit scheme in the name of Post office Recurring Deposit scheme. Follow the steps given below to open a recurring deposit account.

    • If you already have an account with the bank that you wish to open a Recurring Deposit with, you can contact the nearest bank branch or the bank’s customer service cell to open a recurring deposit account.
    • If you wish to open a recurring deposit account in a bank with you do not have an account with, you will have to contact the nearest branch and submit an application form. Also, you will have to submit basic KYC documents to open an account.
    • At the time of opening a recurring deposit account, the tenure as well as the monthly due amount (deposit amount) should be decided. Monthly payments for Recurring Deposits can be done online using ECS, online banking or fund transfer.

    Advantages of Recurring Deposits

    With banks offering an attractive interest rate for Recurring Deposit products, customers can gain the maximum out of their investments. Here are some of the advantages that come with Recurring Deposits.

    • Useful for Planning Short Term Goals

      Investing in a Recurring Deposit is completely risk free and gives guaranteed returns. Investing in Mutual Funds and Stocks might not be a safe option if you have short term investment goals. Because of this nature of RD, investors contemplating on short term goals in a time span of 1 to 3 years choose to involve in Recurring Deposit. Consider the situations given below, Recurring Deposit might just be the right financial product if you are planning to tackle short term situations that require financial assistance.

      • Yearly education fee for your kids
      • If you are employed, higher education costs
      • If you own a home, furnishing and renovation costs
      • Overseas vacation
      • Managing marriage expenses
    • Online Recurring Deposit Features

      With almost all popular banks offering online Recurring Deposit features, investing has just become easier. The customer can deposit money in Recurring Deposit account, close the RD account, open another RD, update information, view transactions, deposit details and do much more online. Think about making an investment and earning interest without even having to leave your home - investing in a Recurring Deposit is as easy as this.

    • Recurring Deposit Interest Rates

      Recurring Deposit interest rates depend on the tenure and deposit amount. In most cases, the Recurring Deposit interest rate is very similar to that of fixed deposits. Interest rates for RD vary from 7.25% to 9% depending on the bank and the plan chosen by the customer. Also, many banks offer higher interest rates for senior citizens. You can also use a RD calculator to find how much interest you will accumulate for the deposit amount, interest rate and tenure.

    • Ease of Investment

      In a Recurring Deposit scheme, the investor has to deposit a fixed sum every month which will build up a savings discipline. For salaried customers, it will be easier to set aside a particular amount every month as savings and for this, Recurring Deposit is the best option. Also, RD schemes come with guaranteed returns and the rate of interest for RD is locked in which will protect the investor from interest rate swings.

    • Flexible Recurring Deposit

      Some banks offer flexible Recurring Deposit schemes where the investor will not be penalized if the amount is not deposited during a particular month. Also, in a flexible RD scheme, you will be able to withdraw the amount from your RD account anytime you want.

    Disadvantages of Recurring Deposits

    A financial product comes with benefits, but will always have some flaws. Let us take a look at certain things that may be slightly discouraging, when you are taking recurring deposit as your saving instrument:

    1. Liquidity: When you deposit the money in an RD, you will never have the privilege to withdraw any part of the money until the term of the deposit is over. Hence, if you are looking for an easy liquidity instrument, recurring deposits are an absolute bad idea. On the other hand, if you want to discipline your savings this disadvantage may work to your benefit.
    2. Rate of Interest: The interest rate that you earn on recurring deposit is much lower that regular fixed deposit schemes, since your deposits are being made in small installments and not as a whole chunk.
    3. Stringent Monthly Installments: It is not possible in the case of recurring deposits to be able to change your deposit amount, regardless of your financial situation at the moment. With a fixed amount for investment each month, someone with chances of extra or less funds for the deposit should be discouraged from opting for this product.
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    Customer Reviews

  • Page 1 of 50 1 2 3 4 5
    • ICICI Bank Personal Loan
      "Very much happy with the service"
      ICICI BANK
      0.5 4.0/5 "Great!"
      The main highlight of ICICI Bank personal loan is quick processing. ICICI took very less time to process the personal loan request. I am very much happy with the interest rate and processing fee charged by ICICI Bank. Furthermore, ICICI took hardly 3 days of time to disburse the funds after submitting my documents.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Sep 22, 2017
    • Bank Bazaar Car Loan
      "Customer firendy"
      ICICI BANK
      0.5 4.0/5 "Great!"
      I am very much happy with the proposal which was offered by bankbazaar. Soon as I registered my details on the portal, bankbazaar quickly acknowledged my details and after identifying my needs passed on the request to the respective bank. No suggestions for bankbazaar as its already doing great.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Sep 22, 2017
    • ICICI Bank Car Loan
      "Very good service"
      ICICI BANK
      0.5 4.0/5 "Great!"
      It was a mere inquiry and after which the request was can celled from my side otherwise the service and response provided by ICICI bank was very good . They contacted me on time that is the highlight of ICICI and they were very much eager to offer the loan. The car model which I have shortlisted is MARUTI SUZUKI ERTIGA VX
      Was this review helpful? 0
      , hyderabad
      Reviewed on Sep 22, 2017
    • review Saving Account
      "Good"
      STATE BANK OF TRAVANCORE
      0.5 3.0/5 "Satisfactory"
      I was having the savings account with the State bank of Travancore. I would like to say that the online banking services were not up to the mark and their response were also not really good. I don't have any suggestion to them till now.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • review Saving Account
      "Wonderful"
      STANDARD CHARTERED BANK
      0.5 5.0/5 "Blown Away!"
      I am having the salary account with the Standard chartered bank and am with them from the last six months of time. Net banking facilities are wonderful one for me and their customer services are good. Online banking services are good one for me.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • HDFC Bank Recurring Deposit
      "Wonderful"
      HDFC BANK
      0.5 4.0/5 "Great!"
      I am having the recurring deposit account with the HDFC bank and the response is very good one. Interest rate is good one with the HDFC bank like and their online banking facilities are good one with them.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • review Other Loan
      "Wonderful"
      BIRLA SUN LIFE INSURANCE
      0.5 5.0/5 "Blown Away!"
      I am having the SIP with the Birla sun life insurance company and the return value is a flexible and the response is good one with them. Net Asset Value is also a good one with the Birla sun life mutual life. I am happy with them.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • HDFC Bank Two Wheeler Loan
      "Better"
      HDFC BANK
      0.5 4.0/5 "Great!"
      I have closed the two wheeler loan with the HDFC bank and they have disbursed the loan amount on immediate basis. I would like to say that the response is good one for me with the HDFC bank.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • HDFC Bank Credit Card
      "Good "
      HDFC BANK
      0.5 3.0/5 "Satisfactory"
      I have closed the HDFC bank credit card due to my personal reason. I would like to say that the response is not really a great one and the credit limit value is good one , also the customer service is fine one for me.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • Bajaj Allianz Health Insurance
      "Wonderful"
      BAJAJ ALLIANZ GENERAL INSURANCE
      0.5 5.0/5 "Blown Away!"
      I am having the health insurance policy with the Bajaj Allianz general insurance company and I have not faced any claims with them till now. Response is good one with the Bajaj Allianz general insurance company. Premium is comfortable one.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • review Two Wheeler Insurance
      "Very Good"
      IFFCO TOKIO GENERAL INSURANCE
      0.5 4.0/5 "Great!"
      I have insured my two wheeler with the Iffco tokio general insurance company and am using it from the last six years of time. Response is good one with them and their customer service is good one. Policy coverage value is also fine one with them.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • Birla Sun Life Insurance
      "Wonderful"
      BIRLA SUN LIFE INSURANCE
      0.5 5.0/5 "Blown Away!"
      I am having the life insurance policy with the Birla sun life and am using it from the last five years of time. Customer service is good one and I have not found any issues on it. Response is also a good one with the Birla sun life insurance company .
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • Bank Bazaar Personal Loan
      "Wonderful"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      Bankbazaar.com is good one for me and I came to know about it through internet search. I would like to say that the online portal of the Bankbazaar.com is also very easy to access.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • ICICI Bank Personal Loan
      "Satisfied"
      ICICI BANK
      0.5 3.0/5 "Satisfactory"
      Rate of interest was okay for the personal loan with the ICICI bank and it took around fifteen days of time to get the loan. I have got the lesser amount rather than what they have quoted. Processing charges were also huge one with them.
      Was this review helpful? 0
      , kottayam
      Reviewed on Sep 22, 2017
    • LIC Life Insurance
      "Excellent Service"
      LIFE INSURANCE CORPORATION OF INDIA
      0.5 5.0/5 "Blown Away!"
      It was an very good service from LIC ,even the agents where very helpful in updating about the new offers and schemes regularly . It was about 3 years I took my insurance till now I never had any issue till now with LIC for my insurance service .
      Was this review helpful? 0
      , mumbai
      Reviewed on Sep 22, 2017
    • Kotak Personal Loan
      "Excellent Service"
      KOTAK MAHINDRA BANK
      0.5 5.0/5 "Blown Away!"
      It was a very good service from KOTAK ,interest rate was fine. Compare to other banks fees and charges was nominal with KOTAK MAHINDRA . Even the documentation part was also fine with KOTAK ,never had any issue with KOTAK service till now so overall it was an excellent service .
      Was this review helpful? 0
      , mumbai
      Reviewed on Sep 22, 2017
    • Axis Bank Saving Account
      "Good Service"
      AXIS BANK
      0.5 3.0/5 "Satisfactory"
      Service was very good from AXIS ,but their customer support was not much good in responding , I never got any offers from them axis . Overall it was a average service from AXIS bank for my salary account .need to improve their service as per my suggestion .
      Was this review helpful? 0
      , mumbai
      Reviewed on Sep 22, 2017
    • Kotak Saving Account
      "Excellent Service"
      KOTAK MAHINDRA BANK
      0.5 5.0/5 "Blown Away!"
      I can say it was a best service I experienced ,representatives ,customer everyone was very helpful when ever I needed with service ,also I use to get many offers from KOTAK through email and sms . So overall it was an excellent service from KOTAK.
      Was this review helpful? 0
      , mumbai
      Reviewed on Sep 22, 2017
    • andhra Bank Education Loan
      "Good "
      ANDHRA BANK
      0.5 3.0/5 "Satisfactory"
      I have closed the educational loan with the Andhra bank and their interest rate was around 12.5% . The response is good one with them and their customer service is not really up to the mark. Settlement procedures went in the nominal way.
      Was this review helpful? 0
      , bangalore
      Reviewed on Sep 22, 2017
    • Kotak Personal Loan
      "Average"
      KOTAK MAHINDRA BANK
      0.5 2.0/5 "Expected more"
      I have already taken the personal loan with the Kotak Mahidnra and the interest rate was very huge like it was around 17%. I would like to say that the customer service is also a kind of okay for me and the response is good one.
      Was this review helpful? 0
      , bangalore
      Reviewed on Sep 22, 2017
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