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Monthly Recurring Deposit

A recurring deposit is a type of term deposit which allows people to save a fixed amount every month. Banks and the Post Office offer these schemes where people can contribute a small sum to build a fund, and also earn interest. This investment option works out well for salaried individuals. Generally, recurring deposits span over a period of 6 months to 10 years. A recurring deposit can be opened with as little as Rs. 10.

Features and Benefits

Interest

The interest you earn on a recurring deposit depends on the amount you contribute and the tenure of the deposit. The rates of interest offered by banks is similar to the interest rates offered on term deposits.

Tenure

The tenures offered will differ between banks. Usually the minimum tenure is 6 months and the maximum tenure is 10 years.

Maturity

Upon maturity, the bank will pay you the sum you have saved plus interest accumulated. This money will either be paid in cash or be credited to your bank account. The maturity value of your deposit will be indicated when you open the RD account.

Loan options

Banks accept RDs as collateral to avail of loans. One can take a loan of 80% to 90% of the value of the deposit.

Tax Deducted at Source

Recurring Deposits recently were brought under taxable income. With effect from June 2015, tax deducted at source (TDS) is applicable on recurring deposits. If the interest on these deposits exceeds Rs. 10,000 per annum, then 10% would be deducted at source. The RD holder will also have to declare interest earned and pay income tax on this amount.

Late Payments

Banks levy a penalty if you miss the monthly deposit by the due date. There are some banks that waive this penalty.

Premature Withdrawal

Most RDs can be closed ahead of the maturity date. A penalty charge plus a penalty on the interest rate may be levied.

How to open a Recurring Deposit

Recurring deposits can be opened in two ways.

  • Approach your bank or the post office. You need to fill out a form and may be required to submit ID proof. You can then make the first deposit and open the account.
  • If your bank has internet banking facilities, you can log into your account and open the RD.

How to fund a Recurring Deposit

  • You can visit your bank branch and make the payment by or on the due date.
  • You can set standing instructions to debit your bank account with the monthly amount on the due date.

Who can open a Recurring Deposit

Recurring Deposits can be opened by all.

  • Resident Indians
  • Hindu Undivided Families
  • Minors are eligible to apply under the guardian.
  • Sole proprietorships, Partnerships, Corporations, Trust, societies, clubs etc.
  • NRIs are also offered RD schemes.

Documents Required for Recurring Deposits

  • 2 recent passport photographs
  • Duly filled and signed application form
  • KYC documents
  • Other documents as requested by the bank

Tips

  • Find out the penalty charges for late payment. If there are charges levied, it is best not to miss a payment. This could reduce the interest you earn.
  • Taking a loan against your deposit should be done only if absolutely necessary. The interest you pay on the loan might be much more than what you earn. It might be more feasible to break the deposit. Research and find out which option would be better.
  • Opening RDs online are easy and convenient. The money will automatically be deducted from your savings or current account.
  • Setting standing instructions will ensure that you never miss a payment. But always ensure that your bank account is funded sufficiently.
  • View the interest chart before you open a recurring deposit. Banks offer different rates for different tenures. You can choose a tenure that gives you the best interest rate.
  • If your total income earned is less than the income tax bracket, you can fill in Form 15G to claim tax benefits on RDs. There will be no TDS on the deposit. Senior citizens can fill up Form 15 H.

Read More Article on Recurring Deposit

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Recurring Deposit by other Institutions

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Customer Reviews

Page 1 of 50 1 2 3 4 5
  • HDFC Bank Recurring Deposit
    "Convenient and safe investment"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I am happy with HDFC recurring deposit , I was opened through online, monthly I invested Rs. 5000 per month at last I got the money around Rs. 45,000 I got better profit. The support team is helpful and the interest rate is also genuine for the customer satisfaction.
    Was this review helpful? 0
    , haldwani
    Reviewed on Apr 15, 2019
  • HDFC Bank Recurring Deposit
    "Its Good"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I have one Recurring deposit with HDFC, Monthly I invest the money around Rs.1000 it has the tenure of one year, if I want I can prolong the duration. The interest rate is good hence I opened the account. I can track my RD details through HDFC netbanking its very convenient.
    Was this review helpful? 1
    , kochi
    Reviewed on Apr 15, 2019
  • SBI Recurring Deposit
    "Satisfactory"
    STATE BANK OF INDIA
    0.5 5.0/5 "Blown Away!"
    It was a very easy process to open a recurring deposit with State Bank of India. The customer support is good. I get a good interest on my savings. The process to open to this account is online. It is easy and smooth. The lock in period starts off from three months onwards.
    Was this review helpful? 1
    , new delhi
    Reviewed on Apr 13, 2019
  • Lakshmi Vilas Bank Recurring Deposit
    "Conveneint RD maintenace"
    LAKSHMI VILAS BANK
    0.5 5.0/5 "Blown Away!"
    I opened recurring deposit through Lakshmi Vills netbanking, best part the customer can invest minimum of Rs.100 to 1 lakh. They are also providing attractive interest rate of 7.6%, the customer service is very helpful in terms handling the queries. If in case I want to withdraw the RD amount there is no charges applicable . Automatically the amount credit to the account.
    Was this review helpful? 1
    , coimbatore
    Reviewed on Apr 11, 2019
  • Federal Bank Recurring Deposit
    "Tactical investment plan"
    FEDERAL BANK
    0.5 5.0/5 "Blown Away!"
    I always Prefer Recurring Deposit instead of Fixed deposit, It is a tactical investment plan . So have invested for higher interest rates in Federal bank . Its a three years plan and going to complete by this year and hoping for better returns .
    Was this review helpful? 0
    , kochi
    Reviewed on Apr 10, 2019
  • ICICI Bank Recurring Deposit
    "Its Good"
    ICICI BANK
    0.5 4.0/5 "Great!"
    For opening recurring deposit in ICICI bank is that's simple. Using my I mobile app, I opened the account without visiting to the bank . I can deposit minimum amount of Rs. 500 for 15 months, the customer support is very good. Even the ICICI interest rate is very normal as per the government.
    Was this review helpful? 1
    , mumbai
    Reviewed on Apr 08, 2019
  • HDFC Bank Recurring Deposit
    "A good return back policy"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    In HDFC they offered me to take a recurring deposit . I need to pay an amount of Rs 2000 /- on a monthly basis . After 12 moths ,Certain amount will be credited to my amount . Executives were so helpful in explaining about the complete information .
    Was this review helpful? 0
    , secunderabad
    Reviewed on Apr 08, 2019
  • City Union Bank Recurring Deposit
    "Satisfactory"
    CITY UNION BANK
    0.5 5.0/5 "Blown Away!"
    I could open the recurring deposit online with City Union bank. The customer support is good and there are no hassles in the overall process. I earn a good interest on this account. The bank provides good services and the online banking is very convenient.
    Was this review helpful? 0
    , chennai
    Reviewed on Apr 05, 2019
  • Citibank Recurring Deposit
    "Hassle free Recurring deposit expereince"
    CITIBANK
    0.5 5.0/5 "Blown Away!"
    I have Recurring deposit with CITI, the interest rate is not upto the mark, if its bulk amount its good. I don't consider the interest I just maintaining it. The process is easy through app I opened the account, the best part before the consumer change the mind, the process complete instantly.
    Was this review helpful? 0
    , mumbai
    Reviewed on Apr 02, 2019
  • HDFC Bank Recurring Deposit
    "Trust worthy"
    HDFC BANK
    0.5 4.5/5 "Excellent!"
    I opened HDFC recurring deposit through online banking , the rate of interest is standard as per the RBI guideline. I can access the account any time by netbanking.It has the tenure of one year, even I have option to prolong the tenure period of my RD.
    Was this review helpful? 0
    , kolkata
    Reviewed on Mar 30, 2019
  • HDFC Bank Recurring Deposit
    "Satisfactory"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I bank with HDFC Bank for a recurring deposit too. The process to open this account was easy and convenient. I can do it online. The interest they provide on the savings is also good. There are no charges related to the account. Overall it has been good.
    Was this review helpful? 0
    , bangalore
    Reviewed on Mar 29, 2019
  • HDFC Bank Recurring Deposit
    "Good Saving"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I have RD with HDFC Bank, I think they are providing 7.2% for one year,its for five account . I have activated the account through online, they do give remain call for the up coming RD amount. Automatically ecs debit from my account, the banker is updated with all the information.
    Was this review helpful? 1
    , mumbai
    Reviewed on Mar 22, 2019
  • IDBI Recurring Deposit
    "satisfactory"
    IDBI BANK
    0.5 5.0/5 "Blown Away!"
    I have a savings account with IDBI BANK since the interest rate is good so have decided to open Recurring Deposit with them and its 5 years now. They offer 8.6% which was satisfactory. Its a monthly investment and have enabled ECS option. This account is manageable online.
    Was this review helpful? 3
    , bangalore
    Reviewed on Mar 19, 2019
  • HDFC Bank Recurring Deposit
    "Good Investment"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I have recurring deposit with HDFC account, I went to the bank and opened the account , within 5 days it got activated. I used to get reminder messasge for monthly RD. Minimum I can deposit from Rs.500 to 1 lakh, the current interest with HDFC around 7.5% its really good.
    Was this review helpful? 1
    , pune
    Reviewed on Mar 17, 2019
  • SBI Recurring Deposit
    "Good Saving"
    STATE BANK OF INDIA
    0.5 5.0/5 "Blown Away!"
    Based on SBI saving account, I have opened recurring deposit with SBI, I am depositing Rs. 20,000 in a month, the bank will provide the interest around 6.7% based on the current financial year. I could access RD account through mobile application.
    Was this review helpful? 6
    , hyderabad
    Reviewed on Mar 11, 2019
  • HDFC Bank Recurring Deposit
    "Good Investment"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I have activated HDFC recurring deposit through online banking within 3 days of time, monthly I deposit Rs. 1000 it has the term of 12 years, the rate of interest is around 8.2%, the support is very good for the recurring queries, there is no charges for the prematures withdrawal.
    Was this review helpful? 5
    , hyderabad
    Reviewed on Mar 11, 2019
  • ICICI Bank Recurring Deposit
    "Excellent feature"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I have another recurring deposit account with ICICI Bank, but this one is opened through iwish. It is a flexible recurring deposit. I can choose a goal and deposit fund as and when I want too. I do not have to do it only on a monthly or quarterly basis.
    Was this review helpful? 2
    , chennai
    Reviewed on Mar 10, 2019
  • ICICI Bank Recurring Deposit
    "Good in all"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I have a recurring deposit at ICICI Bank as well. It was a easy process to open this account. I could do it online and I can make a investment every month. They provide a reasonable rate of interest too. I can even close this account online. I need not have to visit the bank.
    Was this review helpful? 2
    , chennai
    Reviewed on Mar 10, 2019
  • SBI Recurring Deposit
    "Good"
    STATE BANK OF INDIA
    0.5 4.0/5 "Great!"
    The interest rate is nominal when compared with other banks. As my savings account is with SBI and it was easy to do transactions for me and convenient, I have no customer care experience with Recurring Deposit account. I do monthly investment through online net banking.
    Was this review helpful? 2
    , new delhi
    Reviewed on Mar 09, 2019
  • HDFC Bank Recurring Deposit
    "Good for saving"
    HDFC BANK
    0.5 3.0/5 "Satisfactory"
    Every month I used deposit Rs. 5000 for one year of HDFC recurring deposit, the current interest is around 5 to 6% for recurring investment, I have option to take liquidity through online. The customer support is good on my queries regarding RD.
    Was this review helpful? 1
    , bangalore
    Reviewed on Mar 07, 2019
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