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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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Customer Reviews

Page 1 of 50 1 2 3 4 5
  • HDFC Bank Recurring Deposit
    "Good saving bank"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I have taken a RECURRING DEPOSIT from HDFC Bank, and i am paying monthly Rs. 2000. I started this RD presently only. This is a long term plan and i am getting some good returns after 10 years. Customer service was good. This is very useful for future.
    Was this review helpful? 0
    , visakhapatnam
    Reviewed on Dec 06, 2019
  • HDFC Bank
    HDFC Bank Recurring Deposit
    "Good Flexibility"
    HDFC BANK
    0.5 4.0/5 "Great!"
    The best thing about HDFC Recurring Deposit is the online option which is simply good. When i want to increase the amount, i can do it on a monthly basis. The interest rate is less which is 1%. I have selected the lockin period of 3 years and overall satisfied.
    Was this review helpful? 5
    , mumbai
    Reviewed on Nov 12, 2019
  • HDFC Bank Recurring Deposit
    "Good One"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I have chosen the Recurring Deposit from HDFC because its more convenient. Its around Rs. 2000, i have invested every month and its automatically deducted from my account. There is no locking period. They are providing the interest rate of 6.8% to their customer.
    Was this review helpful? 2
    , hyderabad
    Reviewed on Nov 12, 2019
  • HDFC Bank Recurring Deposit
    "Improvement needed on their application"
    HDFC BANK
    0.5 3.5/5 "Pretty good"
    I am very new to HDFC BANK interms of Recurring deposit and its been a first time around 2 to 3months. The helpline number is 24/7 but I did not get response on time. It was a toll free number. The interest rate is nominal. There is no locking period and the application is user friendly but it should be better when compared to ICICI.
    Was this review helpful? 2
    , nasik
    Reviewed on Oct 15, 2019
  • ICICI Bank Recurring Deposit
    "It could be better interms of percentage"
    ICICI BANK
    0.5 4.0/5 "Great!"
    I have started my recurring deposit in ICICI BANK because it was my salary account. I could manage this account online. It would be great, if they could provide connectivity to reach the customer care easily. The interest rate is around 6-7% which is similar like other banks.
    Was this review helpful? 3
    , nasik
    Reviewed on Oct 15, 2019
  • HDFC Bank Recurring Deposit
    "Easy to apply"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I was paying the RD of Rs. 2000 and i started paying the first month amount by last month. In net banking, there is no option to pay my RD. I have chosen HDFC because I'm the account holder of the same account. There is a lockin period of 6 months and at the end of six month it will get converted into fixed deposit. Interest rate is too low.
    Was this review helpful? 6
    , hyderabad
    Reviewed on Oct 10, 2019
  • review Recurring Deposit
    "It's better"
    STANDARD CHARTERED BANK
    0.5 3.0/5 "Satisfactory"
    With Standard Chartered Bank, am having a recurring deposit because they are providing 7% interest rate. I would suggest them to improve the service. Its been more than 1.5years. They have provided me online access to manage the account. I was doing 3K monthly and have chosen tenure of 1year.
    Was this review helpful? 3
    , bangalore
    Reviewed on Oct 10, 2019
  • Kotak Recurring Deposit
    "Need improvement on customer support"
    KOTAK MAHINDRA BANK
    0.5 4.0/5 "Great!"
    I am not getting any calls from Kotak to suggest the investment products but whenever my salary credits I used to invest the money with their recurring deposit, monthly I used to invest Rs.1000 and above . I won't recommend this RD for non customers.
    Was this review helpful? 3
    , bangalore
    Reviewed on Sep 14, 2019
  • HDFC Bank Recurring Deposit
    "Good bank for future"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    HDFC gave me very good interest for my recurring deposit, every month I used to invest Rs.3000 for 6 months, finally I about to get Rs.18,000 without interest as per my RD, the bank gave me Rs. 18594 its really good, the online banking is very convenient.
    Was this review helpful? 10
    , bangalore
    Reviewed on Sep 14, 2019
  • HDFC Bank Recurring Deposit
    "Good Investment"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I have a recurring deposit from HDFC. I have a salary account in HDFC hence i have chosen the same bank. I have been investing the money of Rs. 1000 every month and they are providing a interest rate of 7%. Once my salary is credited, my RD amount will automatically deducted from my account. There is a lockin period of 2 years.
    Was this review helpful? 7
    , bangalore
    Reviewed on Sep 14, 2019
  • Kotak Recurring Deposit
    "Good investment for the future"
    KOTAK MAHINDRA BANK
    0.5 5.0/5 "Blown Away!"
    I had a Recurring deposit for one year with Kotak Mahindra, through netbanking I invested Rs.500 on monthly basis they gave around 7.5% of interest for the total amount. Now I withdrawn the benefits even there is no charges for pre matured as well. The online site is very convenient to invest the money.
    Was this review helpful? 3
    , chennai
    Reviewed on Sep 14, 2019
  • HDFC Bank Recurring Deposit
    "Can do better on the interest"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    Recently I opened HDFC recurring deposit, the interest rate is lesser around 7.25% fpr per annum, every month I activated ecs for Rs. 2000 it has the term of 18 months. There is no pre matured charges to take the liquidity. The online banking is convenient to check the RD transactions as well.
    Was this review helpful? 4
    , bangalore
    Reviewed on Sep 05, 2019
  • HDFC Bank Recurring Deposit
    "Really useful for the people for savings purpose."
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    HDFC People has provided me a RD account when i opened my salary account hence every month Rs. 1000 has been deducted from my account. I get a quick response from HDFC. Their interest rate is quite good. There is no additional charges and there is a lockin period of 18 months.
    Was this review helpful? 4
    , indore
    Reviewed on Sep 01, 2019
  • ICICI Bank Recurring Deposit
    "Best Investment"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I have been investing the money through recurring deposit. Since i have a salary account from ICICI, i have chosen the RD with them. I am investing Rs. 2000 every month and the rate of interest is 7.9% which is fine for me. Once the salary is credited to my amount, by next second automatically the amount is deducted from my account.
    Was this review helpful? 2
    , bangalore
    Reviewed on Aug 31, 2019
  • HDFC Bank Recurring Deposit
    "Good Savings scheme"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I have a basic recurring deposit in HDFC. In HDFC, they themselves deducting the money of Rs. 1000 every month for a recurring deposit. The interest rates are good which is more than 7%. There is no additional charges. There is no lockin period and i can canceled it any time. The time which i have chosen for 27 months.
    Was this review helpful? 5
    , chennai
    Reviewed on Aug 26, 2019
  • HDFC Bank Recurring Deposit
    "Good saving for future"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    When I opened salary account I got the RD along with that, I am investing the money on the monthly basis, the rate of interest for RD is good. They are doing auto deduct from the account balance, I can view the RD transaction through netbanking.
    Was this review helpful? 3
    , bangalore
    Reviewed on Aug 23, 2019
  • HDFC Bank Recurring Deposit
    "Good savings scheme"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I have been maintaining Recurring Deposit account with HDFC, I have opt for one year of recurring deposit. I am investing the money of Rs.2000 per month, the interest rate is good as per th RBI guideline. There is no charges for holding this. Good saving and getting benefited from this.
    Was this review helpful? 4
    , bangalore
    Reviewed on Aug 22, 2019
  • Union Bank of India Recurring Deposit
    "Safe and Secured investment"
    UNION BANK OF INDIA
    0.5 4.0/5 "Great!"
    Currently Union of Bank is offering 7% of interest per annum for the recurring deposit investment. The online option is very good to make the deposits without going to the bank. I can deposit minimum of Rs. 500 to max period, I have option increase the tenure period as well.
    Was this review helpful? 4
    , mumbai
    Reviewed on Jul 29, 2019
  • HDFC Bank Recurring Deposit
    "Good for saving"
    HDFC BANK
    0.5 4.0/5 "Great!"
    I have been maintaining RD account with HDFC, I have opt for one year of recurring deposit. I believe we can deposit Rs.5000 per month, the interest rate is good as per th RBI guideline. There is no charges for the liquidity before the maturity period it won't cover tax.
    Was this review helpful? 4
    , kolkata
    Reviewed on Jul 29, 2019
  • IDBI Recurring Deposit
    "With LIC, you can trust them even more"
    IDBI BANK
    0.5 3.0/5 "Satisfactory"
    The interest rate was good for Recurring Deposit. I believe, IDBI is providing around 8 to 9%. I have done it for one year before 2 years back. The bank is next to my place and their staffs were friendly. They are easily accessible and any queries will be solved in time.
    Was this review helpful? 7
    , bangalore
    Reviewed on Jul 26, 2019
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