• Difference Between LIC and Post Office Recurring Deposit

    A Recurring Deposit is a financial instrument through which individuals can deposit a fixed amount of money every month for a fixed period of time. The money deposited would accrue interest over the time period of the deposit, and the interest would be payable over a monthly, annual or end of maturity basis.

    A Recurring Deposit or RD, as it is commonly known as, is a good alternative for those who do not have a large amount of capital to invest in a Fixed Deposit. As compared to a Fixed Deposit, which requires a one-time deposit of a sum not less than Rs. 10, 000, RD allows for a minimum deposit of Rs. 500, with each subsequent deposit made to be in multiples of 100.

    In this way, an RD allows for individuals to be able to budget as well as save for the future. A Recurring Deposit also pays out the same rate of interest as a Fixed Deposit, depending on the tenure of the deposit.

    An RD can be for tenures ranging from 6 months to a maximum of 10 years.

    The LIC or Life Insurance Corporation of India is a company that was instituted in the year 1956 with the aim of providing life insurance policies to the Indian people. The company is now the largest provider of life insurance in India, with assets worth over $ 230 billion.

    The Post Office, also known as India Post, was set up in the year 1774 by the British Empire. With a network spanning the length and breadth of the country, the Post Office runs services that include letters, parcels as well as financial services like the Public Provident Fund, life insurance and savings accounts and recurring deposits.

    LIC Recurring Deposit

    The LIC Recurring Deposit scheme is a financial tool that enables individuals to save money and earn from their savings. The LIC RD is known as the Jeevan Saral plan and is a recurring deposit plan that allows individuals to deposit a sum of money either monthly, quarterly, half-yearly or annually for a fixed duration, on which they will receive a pre-determined interest.

    Individuals who wish to invest in the LIC Jeevan Saral can do so by opening an account with the LIC, after which they can select the tenure of their deposit. This can range between a minimum tenure of 10 years and a maximum of 35 years.

    This is a long term deposit plan that offers individuals attractive rates of interest, as well as the chance to decide the premium amount. If the individual survives till the deposit matures, he stands to receive 250 times the deposit, which is the maturity sum along with loyalty additions. In case the investor passes away before maturity of the term, a guaranteed return of investment of 250 times the initial amount deposited will be transferred to his heirs.

    Individuals investing in the scheme also stand to benefit from income tax exemptions, as the premium amount as well as the amount deposited is exempted from income tax under Section 80c.

    The LIC Jeevan Saral scheme has another advantage in that it is auto renewed. If an individual forgets to claim the premium upon maturity, the scheme is renewed for an additional 10 years, and he will receive additional premium over the extended period of time.

    The financial future of family members can be safeguarded from an early age through this scheme, as the minimum age for depositors is 12 years of age.

    Elderly investors stand to receive an additional amount as premium, with the minimum amount received as premium guaranteed being Rs. 400 a month.

    In case the individual wishes to opt out of the scheme, he may do so partially after a period of 3 years from the commencement of the scheme.

    To incentivize investors to invest in long term policies, LIC offers a loyalty addition bonus for every year above a 10 year deposit tenure. This amount will be handed over to the investor upon maturity of the deposit.

    Post Office Recurring Deposit

    The Post Office Recurring Deposit scheme is a 5 year RD scheme. Under this, investors stand to receive a guaranteed sum assured upon maturity of the premium deposited over the term.

    The Post Office Recurring Deposit scheme allows investors to make an initial deposit of Rs. 10/- and subsequent deposits in multiples of 5, with Rs. 10/- being the minimum amount. The deposits have to be made on a monthly basis, with the deposits accruing interest at the rate of a Foxed Deposit scheme.

    Investors who choose to would like to invest in the Post Office’s RD scheme can open as many accounts as they desire at any of the post offices in the country. Individuals can also open accounts in the names of minors, with the minimum age for opening an RD based account being 10 years.

    Upon maturity, the investor will receive a Sum Assured along with the interest for the period, i.e 5 years.

    Investors can also choose to open a joint account for their Post Office RD schemes, and can choose to transfer these accounts to any post office within the country.

    Comparison Between LIC Recurring Deposit and Post Office Recurring Deposit

    Given below are the differences between the Life Insurance Corporation’s recurring Deposit and the Post Office Recurring Deposit scheme:

      LIC RD Post Office RD
    Tenure Up to 35 years Up to 5 years
    Minimum amount Rs. 250 Rs. 10
    Subsequent premium amount Multiples of Rs. 50 Multiples of Rs. 5
    Loan against policy Available Not available
    Rate of interest Not guaranteed- loyalty addition provided 8.4% per annum, with interest compounded per quarter
    Tax benefit Yes, under Section 80c up to Rs. 1, 00, 000 (premium amount) No benefit
    Premature Surrender Yes, 80% of Monthly Sum Assured after 3rd year, 90% after 5th year Yes, but interest penalty charged
    Recurring Deposit - Sitemap

    Customer Reviews

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      "Need some scope of improvement"
      AXIS BANK
      0.5 1.0/5 "Really Bad"
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      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 20, 2018
    • ICICI Bank Saving Account
      "Customer friendly Bank"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      ICICI banking experience is good and customer service is also friendly to help on customer's queries. I have been using ICICI account around 3 years, its a zero balance account. There is no charges for online transaction, its a good bank to have salary account with them.
      Was this review helpful? 0
      , bangalore
      Reviewed on Feb 20, 2018
    • ICICI Bank Saving Account
      "Customer friendly Bank"
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      0.5 5.0/5 "Blown Away!"
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      Was this review helpful? 0
      , bangalore
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    • ICICI Bank Credit Card
      "Good Credit Card"
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      0.5 5.0/5 "Blown Away!"
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      , bangalore
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      "Userfriendly Website"
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      0.5 5.0/5 "Blown Away!"
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      , bangalore
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      "Satisfied with the services"
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      0.5 5.0/5 "Blown Away!"
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      Was this review helpful? 0
      , new delhi
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    • Citibank Credit Card
      "Excellent"
      CITIBANK
      0.5 5.0/5 "Blown Away!"
      I heard about CITI, they are providing good offers, almost they got tie up with many exclusive partner than ICICI or credit card so I availed CITI cash back card. But I didn't avail any offer from their end, they gave me good credit limit. But it has annual fee around Rs. 500.
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      , bangalore
      Reviewed on Feb 20, 2018
    • LIC Life Insurance
      "Good Benefits policy"
      LIFE INSURANCE CORPORATION OF INDIA
      0.5 5.0/5 "Blown Away!"
      LIC provide good return and its more secured, they have good endowment plan it has good return, the premium is good enough compared to normal plan it has 10 to 20% extra on endowment policy it has good benefits, it gives good sum assured. tax benefits, financial security unforeseen events.
      Was this review helpful? 0
      , mumbai
      Reviewed on Feb 20, 2018
    • ICICI Bank Saving Account
      "Best banking"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      I have opened a salaried account with ICICI bank,the account is active since 2016.i need not maintain any balance in this account,The mobile App is very easy to use.The Daily withdrawal limit is 25,000 through an ATM center.I don't have any issues with them.
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      , mumbai
      Reviewed on Feb 20, 2018
    • HDFC Limited Home Loan
      "Excellent services"
      HDFC LIMITED
      0.5 5.0/5 "Blown Away!"
      I have purchased a flat and I have taken a home loan from HDFC LTD. The loan process was very easy and I got it done online. The executive came home to take my signature and cheque. After which they contacted me and the disbursement is happening online. I do not have to visit the bank. The rate of interest was of 8.45% and the processing charges is of 5K for 11lakhs loan.
      Was this review helpful? 0
      , new delhi
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    • SBI Saving Account
      "Looking for Better features and service"
      STATE BANK OF INDIA
      0.5 2.0/5 "Expected more"
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      , mumbai
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    • IndusInd Bank Credit Card
      "Best banking"
      INDUSIND BANK LTD
      0.5 5.0/5 "Blown Away!"
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      , mumbai
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    • review Saving Account
      "Smart Banking"
      PUNJAB AND MAHARASHTRA BANK
      0.5 5.0/5 "Blown Away!"
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      , mumbai
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    • Citibank Credit Card
      "Nice experience"
      CITIBANK
      0.5 4.0/5 "Great!"
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      , new delhi
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    • Bank Bazaar Credit Card
      "Best portal for the banking product"
      CITIBANK
      0.5 5.0/5 "Blown Away!"
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      , mumbai
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    • Citibank Credit Card
      "Its Good"
      CITIBANK
      0.5 3.0/5 "Satisfactory"
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      , mumbai
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    • SBI Cards Credit Card
      "Very good offers"
      SBI CARDS
      0.5 4.0/5 "Great!"
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      , new delhi
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    • Bank Bazaar Credit Card
      "Good Experience"
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      0.5 5.0/5 "Blown Away!"
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      , new delhi
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    • review Saving Account
      "Average service"
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      0.5 3.0/5 "Satisfactory"
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      , mumbai
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    • SBI Cards Credit Card
      "Its Good"
      SBI CARDS
      0.5 5.0/5 "Blown Away!"
      SBI credit card has nominal yearly fee around Rs. 499, I got bonus points around 2000 I spent more than Rs. 20,000. SBI gives lots of offers on shopping, swiping etc, credit card is convenient to use. But credit limit is low compared to other banks.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 20, 2018
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