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Recurring Deposit
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What is a Recurring Deposit?


Vinod was working in a small organization in Patna. He has two children, and he constantly thinks about how he will look after his children’s future because he was not earning much and was limited in his expenses. He wanted to send his children for higher studies outside the state, but it was costly. He then heard what a recurring deposit account is and how a small present deposit with his minimal savings can give him the return on his mini investment, which he will do at present. Even after all the day-to-day expenses, Vinod used to deposit his savings in the bank rather than just keeping the money at home and getting nothing additional benefit.

Recurring Deposit

What is Recurring Deposit?

A recurring deposit, or RD, is a special term deposit offered by Indian banks. It’s an investment platform that allows users to make regular instalments and receive reasonable returns. Due to the regular deposit factor and an interest component, it frequently provides flexibility and convenience of investment to users/individuals.

Features Of A Recurring Deposit Account

  • Standing Instructions, which are instructions issued by the customer to the bank to credit the recurring deposit account every month from their Savings or Current account, can be used to fund the Recurring Deposit.
  • The option of taking a loan against the deposit, i.e. utilizing the deposit as collateral, is also available through RD. The account holder can borrow between 80 and 90 per cent of the deposit value. It differs from one particular bank to the next banking institution.
  • RD is a risk-free investment with guaranteed returns that can be used to achieve both immediate and long-term objectives. As a result, RD could be an excellent investment option if you require financial support to reach your goals.
  • The minimum deposit amount varies from one bank to the next. Amounts as low as Rs.10 can be used.
  • Certain banks and NBFCs charge a penalty for early and mid-term withdrawals, while others do not allow them at all.


How do I open a Recurring Deposit Account?

It’s not difficult to gather the documentation needed to start a recurring deposit account. A regular deposit with a connected savings account is available to all residents. There is no need for additional documents once the savings account has been set up. This is the most straightforward and hassle-free way to save money and build guaranteed wealth.

To open an account Offline:

  • Go to your local bank branch where you already have a savings account.
  • Fill out the RD application form and include the instalment amount, payment method, deposit tenure, nominee, and other pertinent information.
  • Make a check or cash payment for the first instalment.
  • The bank will then look after that and proceed within the given time duration by the bank’s representative.


To open an account online, follow these steps:

Follow these steps to start an online recurring deposit account:

  • If your banking account does not yet have Net Banking enabled, you can do so by contacting the bank and completing a Net Banking registration form.
  • To access your account online after your Net Banking has been activated, log in to your account using your assigned User name or ID and password.
  • Select the one that permits you to open a recurring deposit account. When you open an online Recurring Deposit account, you’ll be asked for information like the amount you want to deposit each month and the Tenure of Deposit, or the length of time you want your Recurring Deposit scheme to be operational.
  • After that, you must link your savings account to this account so that you can transfer funds to the account regularly and set up a standing instruction to make the payment automatically on the due day each month.


What are the requirements for applying for recurring deposits?

  • Any person
  • Any government agency
  • Under the supervision of his guardian, a minor under the age of ten can open an RD account.
  • A minor above the age of ten can open a recurring deposit account by proving their identity.
  • Any corporation, business, sole proprietorship, or commercial enterprise.

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