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Recurring Deposit Account

 

Recurring investments may result in a purchase of fractional shares, which are illiquid outside of Robinhood and not transferable. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see our Customer Agreement 'Customer Agreement') related to fractional shares. Manish opens a Recurring Deposit Account with the Bank of Rajasthan and deposits ₹ 600 per. The documents required for opening a recurring deposit account, are not difficult to arrange. All resident individuals can open a recurring deposit with a linked savings account. Once the savings account is opened, no further documentation is required. This is the simplest and most hassle-free way to save money and create wealth with a guarantee. Recurring Deposit Account. Overview Features and Benefits Eligibility Minimum Balance Interest Rates. Enjoy the comfort of banking through our 630 plus branches across the state; Now you can transact 24x7 through our mobile applications/ATM/Debit cards/Kiosk banking/Tablet banking etc.

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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.

Deposit

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)}

Recurring Deposit Account

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

Recurring Deposit Account Meaning

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

Recurring Deposit Account Definition

Banks / Financial companies

Normal Interest Rates

Senior Citizen Interest

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.

High Interest rates.

Useful for short term goals.

Deposit

A Flexible amount can be invested.

Recurring deposit account meaning

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

Recurring Deposit Account

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