Recurring Deposit is a good way of making habit of investing and making money in near future. Today we are going to know everything about Recurring Deposit (RD). Generally you can find this option in every bank in India. So let's start -
 |
| recurring deposit in banks |
What is RD? Full form of RD is Recurring Deposit. Recurring is a saving scheme that helps you to deposit a fixed amount every month for a chosen period of time. In this scheme the interest earned is compounded on a quarterly basis. This bank scheme is obviously good for those people who have little amount and want to invest to get a hefty amount in near future.
How does Recurring Deposit work? You have choose amount that you are going to invest every month. Now you have to enter the amount if you are opening it online and give the tenure of investing. Now the amount you have chosen will be deducted every month from your savings till the tenure you have given for maturity. At the end of the tenure, you will get the maturity amount that is deposit amount with interest earned.
Features of RD? It is a safe investment option and guaranteed returns. You get compound interest quarterly basis. Small investment gives you huge returns after maturity. Senior citizen get extra interest on recurring deposit. Recurring Deposits can be used as a security to get loan.
Income Tax Benefits? Interest received from Recurring Deposit is taxable.
Eligibility of opening RD? Resident individual or Joint Account by 2 or more than it can be opened.
Deposit limits? Minimum monthly deposit is rupees 100/- for starting a RD in bank. The deposit must be in multiples of 10/- There is no maximum limit of monthly deposit but always be careful before starting a RD because once monthly deposit is decided, it can't be changed in between.
Penalty on Non-Deposits? You have to pay penalty for particular month for that you have not deposited amount. It can be vary from bank to bank of charges.
Term / Duration for RD? You can opt for 6 months to 10 years. But months should be in multiples of 3 months. For instance 6, 9, 12, 15, 18, 21, 24 and so on.
Interest Rates for RD? This is same alike fixed deposits. But it varies bank to bank.
Compound Frequency? Quarterly compounding is followed in Recurring Deposit scheme.
Premature closer of account? Penalty of 1% will be imposed and it is same alike any fixed deposit.
Loan Facility? There is a loan facility available up to 90% of the account balance in Recurring Deposit Account.
Account Transfer? Recurring Deposit Accounts can be transferred from one branch to another for free of cost.
Nomination facility for RD? There is a nomination facility. You can make nominee while opening your RD Account or after opening the account but before maturity.
NRI? NRI (Non Resident Indians) cannot open residential Recurring Deposit accounts. They can open NRI RD but this is something different from ordinary Recurring Deposit Accounts.
Hope this has solves all your queries. If you have any other question, comment or can ask through given sections.
Read: FIXED DEPOSIT - STDR (CUMULATIVE) : KNOW EVERYTHING ABOUT STDR
KNOW EVERYTHING ABOUT "FIXED DEPOSIT - TDR (INTEREST PAYOUT)
No comments:
Post a Comment