Recurring Deposit
Under a Recurring Deposit account (RD account), a specific amount is invested in bank on daily basis for a fixed rate of return. The deposit has a fixed tenure, at the end of which the principal sum as well as the interest earned during that period is returned to the investor. Recurring Bank Account provides the element of compulsion to save at high rates of interest applicable to Term Deposits along with liquidity to access those savings any time. Since a recurring deposit offers a fixed rate of return, it does not provide protection against inflation.
There is great flexibility in period of deposit with maturity ranging from 6 months to 120 months. One can start a Recurring Deposit Account with a daily installment of Rs. 100/- only. There is no upper limit on investing. The rate of interest varies between 7 and 11 percent depending on the maturity period. Loan/overdraft facility is also available against Recurring Bank Deposits.
In case of Recurring Deposit being closed before completing the original term of the deposit, interest will be paid at the rate applicable on the date of deposit, for the period for which the deposit has remained with the Bank. Premature withdrawal is also permissible but penalty is levied. TDS is not applicable on Recurring Deposits.
Interest Rates for Recurring Deposit
W.E.F. Dt. 06-12-2023
Period |
Intrest Rates |
A/c closed Before Maturity |
Monthly installment not Received in a Stipulated Time |
| 1 Year | 6.50% | 3.25% | 3.25% |
| Above 1 Year Up-to 3 Year | 6.75% | 5.00% | 4.00% |
| Above 3 Year Up-to 10 Year | 7.00% | 6.00% | 5.00% |
