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What Is A Recurring Deposit?

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A Recurring Deposit, commonly known as RD, is a unique term-deposit that’s offered by Indian Banks. It is an funding software which permits folks to make regular deposits and earn first rate returns on the investment. Due to the regular deposit factor and an curiosity element, it often provides flexibility and ease of investments to users/individuals.

Nonetheless, it is essential to know that RDs are completely different from Fixed Deposits/FDs . RDs are flexible in most aspects. An RD account holder can select to take a position a fixed amount each month while earning respectable curiosity on the amount. RDs are a perfect saving-cum-funding instrument.

Most main banks in India provide Recurring Deposit Accounts, with a term that always ranges between 6 months to 10 years, additionally providing individuals with the opportunity to choose a time period based on their needs. However, the curiosity rate, as soon as decided, does not change in the course of the tenure; and on maturity, the individual will probably be paid a lumpsum amount which includes the common investments as well because the interest earned.

Options of a Recurring Deposit Account

Recurring Deposit schemes purpose at inculcating an everyday habit of saving in individuals

The minimal quantity for deposits often varies from one bank to another. You could make investments with an quantity as small as Rs. 1000.

The minimal interval of deposit is six months, while the maximum period of a deposit is 10 years

The rate of interest is equivalent to that offered for a Fixed Deposit. Subsequently, the interest rates are higher than Savings Account.

Untimely withdrawals are Nonetheless, relying on the bank, they may allow you to close your account before the maturity interval on certain conditions.

A Recurring Deposit may be funded periodically by Standing Directions which might be usually instructions given by the client to the bank, to credit the RD account each month from his/her Financial savings or Current Account.

With HDFC Bank Recurring Deposits, you can-

Start with an investment as small as Rs. a thousand (and in multiples of Rs. 100 after) or as massive as Rs. 14,99,900 monthly

Minimum tenure of about 6 months (and in multiples of 3 months thereafter) up to a maximum tenure of 10 years

For a smaller investment monthly, get interest rates which are equal to that of regular Fixed Deposits

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