It is difficult for people with limited income to deposit sizeable sums of money. Because of this, those who cannot make fixed deposits in the bank can easily prepare sizeable sums of money through a recurring deposit (RD) account. Under RD, you can prepare sizeable sums of money by saving small. The best part is that it gets interest rates equal to FD. We are telling you about RD.
What is RD scheme?
Recurring deposits or RD can help you in big savings. It is a unique term-deposit offered by Indian Banks and Post Office. Meaning you keep putting a certain amount in it every month when you arrive, and after 5 years, you will have a sizeable amount of money in your hand.
Where can you open the RD account?
RD is a kind of small savings scheme. Any person can also open his account in banks, post office, or NBFC. The post Office RD period is 5 years. While in the bank, you can invest in it for 6 months to 10 years.
How many rupees can start from the investment?
In this RD scheme, you can invest a minimum of Rs. 100 per month. You can deposit any amount in multiples of 100 more than that. There is no limit to the maximum deposit amount.
Who can open the account?
Open RD account by any individual, any senior citizen, any minor is above 10 years of age is eligible to open a recurring deposit account if he or she provides proof of the name. Any minor is below or equal to 10 years of age under the guardianship of a natural or legal guardian, any corporate company, proprietorship, or commercial organization, any government organization, and you can open a joint account.
What are the similarities between FD and RD?
Both FD and RD are fixed-income investments, both of which offer guaranteed returns on maturity. The interest rates on FD and RD are also almost the same. In both, you can open a joint account. FD and RD accounts can be opened in the name of spouse, children, parents, or other family members.
What is the difference between these two?
FD can invest in a minimum of 7 days and maximum up to 10 years. RD can invest for at least 6 months and over 10 years. FD has to invest at least 5000, while RD has to invest up to Rs 100.
Documents Required for RD
- Passport size photographs
- Identity proof and address proof of the applicant,
Important factors to check before applying for RD
Recurring deposits are investment products including by banks, post offices, and NBFC. RD deposit is an investment product. It offers safe investment options and guaranteed investment returns. There are many reasons to consider investing in a recurring account.
Interest rates paid by banks vary from bank to bank in different periods. The interest rates repeatedly paid to various depositors by various banks are usually 3.5 to 8.5% p. a. Keeps. The return rate depends on the selected deposit period. Even more interest rate for medium-term deposits. Even for long-term deposits, the rate is slightly lower than the average.
Recurring deposit account periods:
Period is available in three categories:
Short term: A short period usually lasts 6 to 6 months to 1 year
Medium-term: A medium-term usually lasts a year to 5 years
Longevity: long-term period of 5 to 10 years
One method of earning money on capital invested in Recurring deposited accounts is to invest over time, which provides higher interest rates.
Premature withdrawal benefits:
All banks that offer the opportunity to open recurring accounts also offer the option of early withdrawal. Interest is calculated based on how long the term fulfilled, Banks also impose premature withdrawal penalties. So, when investing in a recurring deposit account, choose a bank that offers higher interest rates and charges lower fees on an early withdrawal.
|Bank||RD Interest Rates|
|Senior Citizen RD Rates|
|HDFC RD Interest Rtaes||6.30% p.a.||6.80% p.a.|
|ICICI RD Interest Rates||6.20% – 6.40% p.a.||6.70% – 6.90% p.a.|
|SBI RD Interest Rates||6.00% p.a.||6.50% p.a|
|Post Office RD Rate||7.20% p.a.||7.20% p.a.|
|Bandhan Bank RD Interest Rates||6.50% – 6.75% p.a.||7.25% – 7.50% p.a.|
|Axis Bank RD Interest Rates||6.40% – 6.50% p.a.||7.05% – 7.15% p.a.|
|Lakshmi Vilas Bank RD Interest Rates||7.25% – 7.50% p.a.||7.85% – 8.40% p.a.|