Recurring Deposit Account

The Recurring deposit account is an account in the bank or in a Post office where a depositor deposits a preset amount of money every month for a fixed time period (generally ranging from one year to five years). This format is meant for persons who would like to deposit a fixed amount every month, with the purpose of getting a lump sum after a. With Recurring Deposits, you can set up automatic deposits into your SoFi Invest account at a frequency of your choice. This is a great way to make investing a habit and save for the long-term. To initiate a new recurring deposit: Within the app or web browser, once logged in to your Invest account. Mobile Banking Login to Mobile Banking and select the deposit option select open RD Fill in the required account and nominee details On confirmation, the selected amount will be debited from your savings account and your RD account will be instantly created After the RD account is created, ‘Recurring Fixed Deposit Advice’ will be. Manish opens a Recurring Deposit Account with the Bank of Rajasthan and deposits ₹ 600 per.

More Calculators:

A recurring deposit is a type of term deposit offered by banks / financial institutes which assist people with regular incomes to deposit a fixed amount every month into their RD account and earn interest at the rate applicable.

Recurring deposit (RD) allows customers an opportunity to build their savings via regular monthly deposits of a fixed sum over a fixed period of time.

Recurring deposit matures on a specific date in the future along with all the deposits made every month

It is similar to a fixed deposit of a certain amount in month-to-month installments.

The minimum tenure of this deposit is six months and maximum is ten years.

Compound interest is added to recurring deposit at the end of every financial quarter.

Rate of interest of 5% to 7.25% is offered on RD by various financial institutions.

M =R[{(1+i)^n} – 1] ÷ 1-{(1+i)^(-1/3)}

M = Maturity value of the RD

R = Monthly RD installment to be paid

n = Number of months (tenure)

i = Rate of Interest / 400

Let’s consider an example to understand this better,

You invest a principal amount of 500 for a period of 60 months at an interest rate of 6% and it is compounded quarterly.

M =R[{(1+i)^(n/3)} – 1] ÷ 1-{(1+i)^(-1/3)}

M =500[{(1+(6/400))^(60/3)} – 1] ÷ 1-{(1+(6/400))^(-1/3)}

M =500[{(1+(0.015))^(20)} – 1] ÷ 1-{(1+0.015)^(-1/3)}

M =500[{(1.015)^(20)} – 1] ÷ 1-{(1+0.015)^(-1/3)}

M= 35,031.78

Maturity amount in this case at the end of 30 months will be 35,031.78.

Banks / Financial companies	Normal Interest Rates		Senior Citizen Interest
Banks / Financial companies	less than 5 Years	More than 5 Years	less than 5 Years	More than 5 Years
State Bank of India	5.30%	5.80%	5.40%	6.20%
AXIS Bank	5.50%	6.00%	5.50%	6.00%
ICICI Bank	5.35%	5.85%	5.50%	6.30%
HDFC Bank	5.35%	5.85%	5.50%	6.00%
Union Bank of India	5.45%	5.95%	5.45%	5.95%
IDBI Bank	5.30%	5.90%	5.30%	5.90%
Kotak Mahindra Bank	4.90%	4.50%	5.40%	5.00%
Yes Bank	7.00%	6.75%	7.75%	7.25%
Federal Bank	5.35%	5.50%	5.85%	6.00%
IndusInd Bank	6.75%	6.65%	7.25%	7.15%
Punjab National Bank	5.30%	5.30%	6.05%	6.05%
Bank of Baroda	5.30%	5.30%	5.80%	6.30%
Bank of Maharashtra	5.00%	5.00%	5.50%	5.50%
Indian Overseas Bank	5.45%	5.45%	5.95%	5.95%
IDFC Bank	6.75%	6.25%	7.25%	6.75%

Note: Please refer to the respective bank websites and confirm the interest rates before investing. The above chart is updated in August 2020.

Recurring Deposit Account Images

High Interest rates.

Useful for short term goals.

A Flexible amount can be invested.

Loan on Recurring deposit

Penalty / Charges vary from bank to bank. However, it is observed that maximum of 2% of agreed upon interest rate is charged on premature withdrawing.

Please refer the below links for detailed chart on interest rates:

SBI – https://www.sbi.co.in/web/personal-banking/investments-deposits/deposits/recurring-deposit

Axis – https://www.axisbank.com/retail/calculators/recurring-deposit-calculator

ICICI – https://www.icicibank.com/Personal-Banking/account-deposit/recurring-deposits/index.page

HDFC – https://www.hdfcbank.com/personal/resources/rates

Union Bank – https://www.unionbankofindia.co.in/english/personal-recurring-deposit-scheme.aspx

IDBI Bank – https://www.idbibank.in/interest-rates.asp

Kotak Mahindra Bank – https://www.kotak.com/en/personal-banking/deposits/recurring-deposits/interest.html

Yes Bank – https://www.yesbank.in/personal-banking/yes-individual/deposits/recurring-deposit

Federal Bank – https://www.federalbank.co.in/deposit-rate

IndusInd Bank – https://www.indusind.com/in/en/personal/rates.html

Punjab National Bank – https://www.pnbindia.in/Interest-Rates-Deposit.html

Bank of baroda – https://www.bankofbaroda.in/interest-rates-charges.htm

Bank of Maharashtra – https://www.bankofmaharashtra.in/domestic_term_deposits

Indian OverSeas Bank – https://www.iob.in/Domestic_Rates

IDFC Bank – https://www.idfcfirstbank.com/content/dam/IDFCFirstBank/Interest-Rates/Interest-Rate-Retail.pdf

What is a Recurring Deposits Account?

How does Recurring Deposits account works?

An average fixed deposit ensures that a person allocates a sum and in a particular period of time, you can withdrawal this amount. Meanwhile, you don’t have access to touch the amount of sum or maybe complement this. The recurring deposit operates over an equivalent process. The main difference in this kind of scheme is instead of depositing a bulk amount you should submit a specified amount in your account, which you decided at the time of opening of your RD account, each month. This amount could be a small amount that can’t blank your pocket much. And at the time of maturity you will have a big amount over your principle amount including the interest.

How to open a Recurring Deposits account

You can open a RD account by visiting any bank/post office and filling up the form, by providing some other formal documents like PAN Card & residential proof that is used for opening an RD and pay the first month’s money to the bank/post office.

One can open a recurring deposit for a period of as less as 6 months or in multiples of 3 months with a highest term of 10 years. The interest rates presented under a Recurring Deposit is alike to the rates given under fixed deposits. If one is a senior citizen, then 0.5% extra rate of interest is granted, similar to India post & some banks also give a facility of grace period as well, which is about to 5 days.

Can you break Recurring Deposit?

Yes, you can break a recurring deposit. The bank/post office cannot decline that. But, the bank/post office has the right to retain/cancel the interest unpaid on it because you are not letting the recurring deposit complete or finish its complete term. You may get the sum you deposited but not any interest.