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Recurring Deposit accounts have been around for a while, and their popularity has not diminished. Many people of varied age groups would happily place their trust in an RD account. So, what is a Recurring Deposit account and why is it so popular? Let’s find out.
A recurring deposit means making regular deposits. It is a service provided by many banks where people can make regular deposits and earn decent returns on their investments.
“An RD account means a banking or postal service account in which a depositor puts a certain amount of money each month for a set length of time (commonly spanning from one year to five years).” This structure is for people who want to put down a set amount each month with the goal of receiving a payout after a few years.
The recurring deposit Plan's process of making small monthly savings allow the user to build up an appealing sum at maturity. The Recurring Deposit interest rates are calculated on a quarterly compounded basis.
An ordinary fixed deposit implies that a person sets aside a sum of money that can be withdrawn after a set length of time. Meanwhile, you are unable to alter the sum of the money or possibly supplement it.
The recurring deposit follows a similar procedure with one primary difference. Instead of investing a lump sum, you should deposit a specific amount into your account each month, which you determined when you opened your RD account. This could be a tiny sum that won't completely empty your wallet. And when the sum matures, you'll have a large sum in excess of your principal, plus interest.
You can create an RD account by going to any bank/post office and filling out the form. After which, you will have to provide additional formal documents like a PAN card and proof of residence, and pay the first month's amount to the bank/post office.
A Recurring Deposit account can be opened for as little as 6 months or in multiples of 3 months, with the longest term being 10 years. The interest rates offered by a Recurring Deposit are similar to those offered by fixed deposits. If you are a senior citizen, you will be given a 0.5 percent extra rate of interest, similar to India Post, and certain banks will also give you a buffer period of roughly 5 days.
Some institutions such as IDFC FIRST Bank give you the option of opening an RD account online. In a few simple steps, you can open a RD account with IDFC FIRST Bank. Enter basic information such as your name, email address, and mobile number to open your Recurring Deposit account online.
An RD account means a banking or postal service account in which a depositor puts a certain amount of money each month for a set length of time (commonly spanning from one year to five years).
Yes, it is possible to terminate a recurring deposit. That is something that the bank or post office cannot refuse. However, because you are not allowing the recurring deposit to conclude its term, the bank/post office has the right to keep/cancel the interest that has not been paid. You may receive the amount you invested, but you will not receive any interest. Multiply your earnings within minimum duration of 6 months. Apply Now
RD accounts have a six-month minimum deposit period and a ten-year maximum deposit period. Recurring Deposit accounts pay a higher rate of interest than savings accounts. Banks usually compound interest once each quarter. RD accounts have a lock-in period of 30 days to 3 months, depending on the bank.
With competitive interest rates, no penalty on missing instalments and easy online access, IDFC FIRST Banks’s Recurring Deposit account is one of the better RD accounts you can open today. Visit our website to get more information on opening an RD account with us.
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
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