What Is A Recurring Deposit?

What Is A Recurring Deposit?

A Recurring Deposit, commonly known as RD, is a novel time period-deposit that's offered by Indian Banks. It is an investment instrument which allows individuals to make regular deposits and earn respectable returns on the investment. As a result of common deposit factor and an curiosity element, it usually provides flexibility and ease of investments to customers/individuals.

However, it is essential to know that RDs are completely different from Fixed Deposits/FDs . RDs are versatile in most aspects. An RD account holder can choose to take a position a fixed quantity every month while incomes first rate curiosity on the amount. RDs are an excellent saving-cum-investment instrument.

Most major banks in India offer Recurring Deposit Accounts, with a term that always ranges between 6 months to 10 years, also providing individuals with the chance to decide on a time period in line with their needs. However, the curiosity rate, as soon as determined, does not change during the tenure; and on maturity, the person shall be paid a lumpsum amount which consists of the common investments as well as the curiosity earned.

Options of a Recurring Deposit Account

Recurring Deposit schemes goal at inculcating an everyday habit of saving in folks
The minimum amount for deposits usually varies from one bank to another. You possibly can invest with an quantity as small as Rs. 1000.
The minimum period of deposit is six months, while the utmost interval of a deposit is 10 years
The rate of interest is equal to that offered for a Fixed Deposit. Due to this fact, the interest rates are higher than Savings Account.
Untimely withdrawals are Nevertheless, relying on the bank, they could help you shut your account before the maturity period on certain conditions.
A Recurring Deposit will be funded periodically by way of Standing Directions that are usually instructions given by the customer to the bank, to credit the RD account each month from his/her Financial savings or Current Account.
With HDFC Bank Recurring Deposits, you possibly can-

Begin with an funding as small as Rs. 1000 (and in multiples of Rs. one hundred after) or as large as Rs. 14,ninety nine,900 per thirty days
Minimal tenure of about 6 months (and in multiples of three months thereafter) as much as a maximum tenure of 10 years
For a smaller funding per thirty days, get interest rates which might be equal to that of standard Fixed Deposits

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