Recurring Deposits

  • Recurring Deposit is a special kind of Term Deposit offered by banks in India which help people with regular incomes to deposit a fixed amount every month into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits.It is similar to making FDs of a certain amount in monthly installments, for example Rs.1000 every month. This deposit matures on a specific date in the future along with all the deposits made every month. Thus, Recurring Deposit schemes allow customers with an opportunity to build up their savings through regular monthly deposits of fixed sum over a fixed period of time. Minimum Period of RD is 6 months and maximum is 59 months.
  • The Recurring Deposit can be funded by Standing instructions which are the instructions by the customer to the bank to withdraw a certain sum of money from his Savings/ Current account and credit to the Recurring Deposit account.
  • When the RD account is opened, the maturity value is indicated to the customer assuming that the monthly installments will be paid regularly on due dates. If any installment is delayed, the interest payable in the account will be reduced and will not be sufficient to reach the maturity value. Therefore, the difference in interest will be deducted from the maturity value as a penalty. The rate of penalty will be fixed upfront. Interest is compounded on quarterly basis in recurring deposits
  • Rate of Interest offered is similar to that of Fixed Deposits. Earlier it seemed to be one of the best method to save the amount yield after years of deposit. It was effective from June 1, 2015 TDS is applicable on RDs.

Types Of Account :

  • Individual Account
  • Joint Account

Require Documents:

Any of the following documents bearing photograph of the holder is also accepted for the purpose of identification

  1. Valid Passport
  2. PAN Card
  3. Driving Licence
  4. Voters ID Card
  5. Defence ID Card
  6. Identity Card of employees of central / state Govt. Public Sector Undertakings.
  7. Senior Citizen’s Card.

Signature of Depositor:

  • 1. Every account holder will be required to give a specimen of his/her signature for record in the presence of an authorized officer of the Bank, at the time of opening of the account.
  • 2. All cheques and letters to the Bank must be signed strictly in accordance with the specimen signature recorded at the branch.