Recurring Deposit as the name implies is a special type of Term Deposit scheme offered by Indian banks where the account holder can set a fixed amount to be deposited regularly into their account (i.e. Recurring Deposit Account) every month and earn the benefits of interest rates applicable to Fixed Deposits.
In short, an account where you deposit FDs of a fixed amount in monthly instalments(for e.g. Rs. 500 every month) instead of a lump sum at one go is termed as a Recurring Deposit account.
Similar to Fixed Deposit schemes, you can withdraw all your deposited amount with interest at the time of maturity. The only major difference is that you don’t have to deposit a huge amount at one go as you do with Fixed Deposit scheme and instead build up the savings by small regular deposits every month to set up a RD account.
Top Options to Open a Recurring Deposit Account in India:
| Maturity Time | Institution | Interest rate | Full details |
|---|---|---|---|
| 1 Year |  | 6.80% | State Bank of India (SBI) |
| 1 Year |  | 7.30% | HDFC Bank |
| 1 Year |  | 6.90% | ICICI Bank |
| 1 Year |  | 7.30% | Axis Bank |
| 1 Year |  | 7.25% | IDBI Bank |
| 1 Year |  | 7.00% | Kotak Mahindra Bank |
| 1 Year |  | 6.75% | Punjab National Bank (PNB) |
| 1 Year |  | 6.80% | State Bank of Hyderabad (SBH) |
| 1 Year |  | 7.25% | Yes Bank |
Extra Bonus:
| Maturity Time | Institution | Interest rate | Full details |
|---|---|---|---|
| 1 Year |  | 7.30% | Post office |
Benefits of Recurring Deposit:
- You may try to save a specific amount of money every month for the future. But most of the times you ignore it or forget about the savings. Recurring Deposits guarantee a fixed monthly savings into your account with good interest rates compared to a savings account.
- With RD, you can save money for future investments such as buying a car or wedding as it comes with a clear tenure. The money can’t be withdrawn unless you complete the tenure of your Recurring Deposit account.
- Just like any FD scheme, RD also offers a fixed rate of interest. The interest rate don’t fluctuate like other investment schemes.
- There is no TDS on the interest earned from recurring deposits which means that you get the maturity amount fully credited to your account after the tenure is completed.
- Most often the RD accounts are linked with your savings bank account. In this way, it will become easier to transfer funds every month from your savings bank account to the recurring deposit account without any need to visit the bank again and again every month.
Disadvantages of Recurring Deposit:
- Recurring Deposits are not the same as your simple savings bank account where you can withdraw or deposit money as you like. There is a fixed monthly deposit as well as a fixed tenure for your RD. You can withdraw the money once the tenure is completed.
- There is no way to change the monthly amount once fixed for your recurring deposit. Hence, if you are in a business or service where your income fluctuates a lot then RD schemes are not for you.
- Compared to other investment schemes, RD offer lower interest rates.
My new sbi account apply to bank manager I rakyost attached new bank tinkyou
cash is not refunded in atm
Dear Sir
kindly please can you tell me, sir, how to open RD A/c in the post office…
that,s reason is I am working for Kuwait ….do you have any online links to open this A/c….if I will save monthly 25000/ after 2 years how much Gets return.
Good list.. But update all banks with current recurring deposit rates.