Overview of HDFC Bank
Known as Housing Development Finance Corporation Limited (HDFC) during its initial days, HDFC was one of the first to be conferred with an ‘in principle’ approval from Reserve Bank of India (RBI), in the year 1994, to set up a bank in the private sector. It started operating as a Scheduled Commercial Bank in January 1995.
HDFC Bank currently boasts of a network as wide as 3659 branches and 11,633 ATMs in 2287 towns and cities across India. The quick, personalized and transparent service has made it a very popular, trusted and loved bank amongst its customers. HDFC Bank has grown rapidly over the past nine years and garnered the appreciation of both national and international organizations.
Recurring Deposit from HDFC Bank
So, you just acquired the habit of saving but don’t have a lump sum amount at your disposal for a fixed deposit? Well, if you had to count your blessings, Recurring Deposit should definitely feature on that list. For the ones with a regular income, RD should be a way of life! It is a term deposit which allows you to deposit a fixed amount every month (in your RD account). The icing on the cake being, you earn interest rates applicable to Fixed Deposits.
HDFC Bank offers a wide array of services, tailor-made to suit the varied needs of every customer. Recurring Deposit is one of them. The bank offers highly flexible RD options to its customers, at competitive interest rates. You get to enjoy the interest rates of a regular fixed deposit for investing a much smaller amount, every month. A Recurring Deposit account with HDFC also lets you enjoy additional benefits like grace facility of 5 days, TDS (Tax Deductible at Source) not being applicable on the interest rate, as per the current income tax rules.
Types of Recurring Deposits by HDFC Bank
- Regular Recurring Deposit
- NRE Recurring Deposit
Features and Benefits of Regular Recurring Deposit
The features of a regular Recurring Deposit, offered by HDFC Bank, are –
- The investment amount can vary from an amount as small as Rs. 1000 up to Rs. 14,99,900 per month.
- The tenure ranges from a minimum of 6 months to a maximum of 10 years.
- For an NRI customer, the minimum RD tenure is 12 months.
- You get to enjoy the interest rates of regular Fixed Deposits by investing a much smaller amount every month.
- The interest earned on your Recurring Deposit is TDS free.
- If you pay the monthly RD instalment within 5 days of the instalment due date, you will not be charged any penalty by the bank. These 5 days fall within the grace period facility provided by the bank.
- Once the instalment amount has been fixed, it cannot be altered.
- In case there are more than two months of instalments overdue, and you pay enough to cover just one instalment, it will be directed towards the first/earliest month of overdue.
- Payment of a single instalment cannot be divided in parts.
- The minimum lock-in period of an RD is one month.
- If you decide to close your RD prematurely within a period of a month, you will not be eligible to get the interest amount. Only the principal amount will be returned.
- Interest on RD is paid only on maturity of the same.
- Irrespective of overdue instalments, an RD will mature and shall be due for repayment on the completion of the stipulated tenure.
- If the scheduled payment of instalments is delayed, the maturity amount shall vary, as it will be subject to penal charges
- Penal charges are calculated on a 30/360 days basis.
- In case of frequent failure to pay the monthly instalments, the bank has every right to close the RD account. The interest rates applicable on such closed accounts will be at the discretion of the bank.
Features and Benefits of NRE Recurring Deposit
- The investment amount can vary from an amount as small as Rs. 1000 up to Rs. 14,99,900 per month.
- The tenure varies from a minimum of 12 months to a maximum of 10 years.
- Interest rates are equal to the one applicable for NRE Fixed Deposits.
- The interest and principal is tax free (only in India).
- If the monthly RD instalment is paid within 5 days of the stipulated instalment date, you are not subject to paying any penalty.
- The minimum lock-in period of NRE RD is one year.
- No interest shall be paid to the depositor if he/she closes his RD account within a year. However, the principal amount shall be returned to him/her.
- The interest on NRE RD is compounded quarterly (subject to applicable interest rates).
Interest Rates offered by HDFC Bank on Recurring Deposits
HDFC Bank offers RD accounts to its customers at competitive rates of interest. It varies from a minimum of 8% to a maximum of 8.50% depending on the term of your deposit. The minimum term being 6 months and the maximum being 120 months. Senior citizens are eligible to enjoy an additional interest rate of 0.50% over the existing interest rates.
Nomination for Recurring Deposits
If an RD account is opened on a single person’s name, then either a new nominee can be added or the nominee who has already been added to the base savings account can be selected. In case of an RD in a joint name, the chosen nominee should be the same as the one in base savings account. HDFC Net Banking nomination facility can be used in both the aforementioned cases.
If you wish to add a completely new nominee, you need to visit the nearest HDFC branch, as HDFC Net Banking does not provide the facility of adding a ‘new’ nominee for RD.
How to Pay Installments for a Recurring Deposit (RD) Account with HDFC Bank
A Recurring Deposit account enables you to save money with an advantage of interest that be earned on the investment. When you create an RD account, you get to choose the tenure of the account and the investment amount considering the fact that your saving account will automatically be debited for the installments. While creating the RD account, the saving account will be set for an auto debit for the entire period and you won’t be able to make changes to it.
You are expected to make the payments within the due time, if the payments are not made within the due date, the interest payment on your investment will be reduced as per the terms. If you fail to make the payments for certain months, the bank will hold the right to close the RD account. You are allowed to pay more than the installment amount, however, your account won’t be eligible for additional interest for the extra amount deposited towards the account. If you do not have sufficient funds for the installment, HDFC Bank will provide you with a grace period of 5 days.
HDFC Bank Recurring Deposit Withdrawal Before Maturity
HDFC Bank Recurring Deposit (RD) account can be liquidated by either contacting the branch directly or through NetBanking. The latter is comparatively an easier process and doesn't require more than couple of minutes. Before you proceed with the steps, you need to consider that you won't be eligible for the complete interest amount. Since your account has been liquidated prematurely, you will receive the principal amount and a partial interest amount depending on the terms. You can login to NetBanking with your Customer ID and IPIN and follow the instructions mentioned below to liquidate your RD account:
- Click on 'Accounts' tab
- Click on 'Transact' on the left side of the menu
- Choose 'Liquidate RD'
- Select the RD account that you wish to liquidate
- Verify the details
- Confirm to liquidate
You will see a confirmation page with the liquidation details. Once you liquidate your RD Account, the funds will reflect on your Savings Account.
Frequently asked questions
- Is TDS applicable on Recurring Deposits?
No, as per the existing income tax rules TDS is not applicable on Recurring Deposits.
- What is the minimum deposit amount to open an RD account?
You can open a RD account with a nominal amount of Rs. 1000.
- What is the maximum deposit amount for an RD account?
It is Rs. 14,99,900/-
- Is nomination facility available on RD accounts?
Yes, nomination facility is available on RD accounts.
- Are partial payments applicable on Recurring Deposits?
No, you can’t make partial payments on recurring deposits.
- What is procedure to liquidate an RD account prematurely? To prematurely liquidate your RD account, you have to submit your RD advice or written instruction (signed by all account holders) at the nearest branch. If you hold an RD under ‘Sole Owner Name’, the deposit can be liquidated via net banking.
- Can I open a RD account in joint names?
Yes, you can open a RD account in joint names.
- Can a minor be the first applicant of a HDFC Bank Recurring Deposit account?
Yes, a minor can be the first applicant of a HDFC Bank Recurring Deposit account.
- What is the tenure for HDFC Bank Recurring Deposit (RD)?
The minimum tenure for HDFC Bank Recurring Deposit is 6 months and the maximum tenure is 10 years. After 6 months, you can select a period in multiples of 3 months.
- Are depositors allowed to change the installment due date and tenure of their HDFC Bank Recurring Deposit account?
No, depositors are not allowed to change the installment due date and tenure of their HDFC Bank Recurring Deposit account. They can choose to open a new RD account.
- Are depositors allowed to select their installment date?
Installment date is dependent on the date of opening the Recurring Deposit account.
- Can I make partial withdrawals from my HDFC Bank Recurring Deposit account?
No, you cannot make partial withdrawals from your HDFC Bank Recurring Deposit account.
- Does HDFC Bank provide overdraft facility for Recurring Deposits?
No, HDFC Bank does not provide overdraft facility for Recurring Deposits.
Know the Current Recurring Deposit Rates:
- HDFC Recurring Deposit Rates
- HDFC Bank RD Interest Rates Comparison with Other Banks and Institutions
News about HDFC Recurring Deposit
HDFC’s SLI Aims to Cover All 30 Districts of Odisha
In a move to empower the underprivileged female sections of the rural population, HDFC aims to shell out Rs. 500 crores in Odisha under Sustainable Livelihood Initiative (SLI) scheme. This amount is three times higher than the disbursements made last year. By reaching out to the unbanked and underbanked sections of the society, SLI scheme so far has empowered more than 2.5 crore people in the country. According to HDFC Bank Sr Executive Vice President and Business Head of SLI, Manohara Raj, the initiative aims to include all the 30 districts of Odisha and cover 3 lakh beneficiaries by the end of this financial year. Fixed Deposits, Micro Recurring Deposits, Financial Literacy etc. are some of the services offered under the SLI scheme of HDFC.
5th October 2016