• 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
      "Nice experience"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      The rate of interest is good at HDFC Bank for the recurring deposit. It is almost the same as other banks. The service online is good as I can open and close this account online without having to go to the banks. The overall process is fine and I am glad to bank with them
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 19, 2018
    • ICICI Bank Recurring Deposit
      "Wonderful"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      I have the recurring deposit account with the ICICI bank and the interest rate is good. Online banking services are good one with the ICICI bank. I dont think about the interest rate and other aspects. Everything is better one with the ICICI bank.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Feb 15, 2018
    • HDFC Bank Recurring Deposit
      "Hassle Free experience"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      HDFC recurring deposit interest rate is nominal, I opened account through online, their notification part is good. I make the monthly investment around Rs. 15000 for the tenure of 24 months. At last I got the return got credited in the account.
      Was this review helpful? 0
      , mumbai
      Reviewed on Feb 15, 2018
    • ICICI Bank Recurring Deposit
      "Excellent"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      I am having the recurring deposit account with the ICICI bank. I am depositing rs 2,000 monthly. This policy I have takern for 25 years. The returns and policy benefits are very good. Customer service is very good.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 10, 2018
    • HDFC Bank Recurring Deposit
      "Good Service"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      First time I opened RD in HDFC, but the return was less. They offered me the interest rate around 6.5%, Then I quite in amount, I activated this service through online and once cancel it the amount got credited in a month. The service is absolutely fine but interest rate is the concern.
      Was this review helpful? 0
      , mumbai
      Reviewed on Feb 09, 2018
    • SBI Recurring Deposit
      "Good "
      STATE BANK OF INDIA
      0.5 4.5/5 "Excellent!"
      For more than five years of time, I am having the recurring deposit with the State bank of India and I have not found any loopholes with them. I would like to say that the online portal is good one for with the State bank of India.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 07, 2018
    • ICICI Bank Recurring Deposit
      "Best"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      I am having the recurring deposit account with the ICICI bank and the customer service is good one. I would like to say that the online banking services are also good one with the ICICI bank and I have not faced any such issues with them till now.
      Was this review helpful? 0
      , chennai
      Reviewed on Feb 06, 2018
    • SBI Recurring Deposit
      "Good"
      STATE BANK OF INDIA
      0.5 4.0/5 "Great!"
      I have my salary account with State Bank of India. The customer service was okay. I am using this account for 20 years and It is a zero balance account. I use a domestic debit card. The daily withdrawal limit was happy. ATM services are convenient and good. They don't charge for IMPS and NEFT transfer.
      Was this review helpful? 0
      , raigarh
      Reviewed on Feb 06, 2018
    • SBI Recurring Deposit
      "Excellent"
      STATE BANK OF INDIA
      0.5 5.0/5 "Blown Away!"
      I am having the recurring deposit account with the State bank of India and the customer service is good one. Response is fine one for me with them. I would like to say that the online portal is also really easy to access.
      Was this review helpful? 0
      , thane
      Reviewed on Feb 06, 2018
    • HDFC Bank Recurring Deposit
      "Best one"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      I was having the recurring deposit with the HDFC bank on that time. Rate of interest was around 6.9% and the customer service was good. Penalty charges were around 1% of the interest rate charges on accumulated money.
      Was this review helpful? 0
      , new delhi
      Reviewed on Feb 02, 2018
    • HDFC Bank Recurring Deposit
      "nice recurring deposit"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      I had a Recurring deposit in Hdfc Bank. I got satisfied Interest rate in Recurring Deposit. I can monitor this Recurring Deposit Activities in my Hdfc Mobile Banking application. I can check the status of my deposit maturity status and interest certificate also.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 31, 2018
    • SBI Recurring Deposit
      "Good service"
      STATE BANK OF INDIA
      0.5 4.0/5 "Great!"
      I have a Recurring Deposit with SBI from last 7-8 years, the experience was good so far and i did not face any issues with this bank. Customer support team gave all the right information and there was no delay in the services. I pay an amount of Rs 8000 every month and i get 9% interest on returns and i am satisfied with it.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 23, 2018
    • IOB Recurring Deposit
      "Excellent banking"
      INDIAN OVERSEAS BANK
      0.5 5.0/5 "Blown Away!"
      I have opened a Recurring deposit with Indian Overseas bank.I have been holding this account for last one year.I need not maintain any balance in this account as mandatory,this is on a cumulative basis.I have a good experience talking to the bankers.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 23, 2018
    • HDFC Bank Recurring Deposit
      "Good service"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      I had a Recurring Deposit with HDFC bank 3 years back, the services are very good with this bank and i did not find any issues with this bank. I pay an amount of Rs 4200 every month and the maturity period is after 5 years. Customer service was good and they responded on time. I get interest of 9% which is sufficient and i am happy with the returns.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 19, 2018
    • ICICI Bank Recurring Deposit
      "Good service"
      ICICI BANK
      0.5 4.0/5 "Great!"
      I have a Recurring Deposit from ICICI bank from last 3 years, the services are pretty good when compared to all other banks. I pay an amount of Rs 1500 every month and the interest rate is satisfactory. Customer service is good and they responded on time. I am happy with the returns with this bank which is 9%.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 18, 2018
    • Axis Bank Recurring Deposit
      "Recurring Deposit with AXIS"
      AXIS BANK
      0.5 4.5/5 "Excellent!"
      As I'm holding my salary account with AXIS Bank I decided to maintain a Recurring Deposit account with them. Now I have this account for the past 1 year. They offer me 7 to 8% interest. The funds were auto debited from my salary account to RD account. The interest rates can be improved. Their customer care service is pretty good although they don't bother much about customer satisfaction. Despite being a salary account holder for 2+yrs, they haven't offered me any credit card so far. I am only having their Neo card which is the most basic one. NOT COOL AXIS !!!!!
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 17, 2018
    • Union Bank of India Recurring Deposit
      "Good service"
      UNION BANK OF INDIA
      0.5 3.0/5 "Satisfactory"
      I had a Recurring Deposit with Union Bank of India and the experience was quite good. I pay an amount of Rs 3000 every month and in return i get a certain amount with the interest of 7.5% which is satisfactory. Customer service was fine and they responded on time. The maturity of the RD is 1 year and i am satisfied with the returns.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 12, 2018
    • HDFC Bank Recurring Deposit
      "Excellent"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      I have opened a Recurring Deposit with HDFC Bank. The maturity period is one year and it was taken for my daughter. I am paying 1000 rupees per month through net banking or cash. All the facilities are good with HDFC Bank. The customer service and response was very good.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 04, 2018
    • Vijaya Bank Recurring Deposit
      "Good"
      VIJAYA BANK
      0.5 4.0/5 "Great!"
      I have taken Recurring Deposit account with Vijaya Bank. I am paying 20,000 rupees for 6 months. The interest rate was nominal compared to other bankers. The customer service and response was good. The premium amount was paid through ECS.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 02, 2018
    • HDFC Bank Recurring Deposit
      "Good"
      HDFC BANK
      0.5 4.0/5 "Great!"
      I have taken a Recurring Deposit with HDFC Bank long back. Everything is renewed and reimbursed with them. I have chosen this bank, it was very easy to use the net banking and the interest rate was good. I have taken this account through online and I hardly visit the branch to exchange the foreign currency.
      Was this review helpful? 0
      , navi mumbai
      Reviewed on Dec 29, 2017
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