Banks and financial institutions offer various investment options to their customers and a Recurring Deposit is the most popular option. They are a preferred choice since they carry no risk and provide a guarantee of assured returns. However, if you are clueless about what an RD is, these questions will answer your queries.
What are Recurring Deposits about?
RDs are Term Deposit that lets you make periodic deposits of a fixed sum for a specific tenure and earn assured returns at a fixed rate. RD rates are determined by banks and vary according to your tenure.
What is the minimum deposit?
While the minimum amount that you deposit in an RD differs across banks, some allow you to begin with a monthly investment of just Rs. 100.
Can you open multiple RDs?
Yes, you can open as many RDs as you want in the same bank if you are eligible and have the required documentation. In addition, opening an RD is easy these days and you can simply use the Banking app or Internal Banking portal to open it from anywhere.
What is the maximum deposit amount?
There is no upper limit on the deposit amount that you invest in an RD.
Can an RD be withdrawn at will?
Yes, you can withdraw your RD prematurely. Hence, it is highly liquid and can come to your rescue during financial emergencies. However, you might need to pay a penalty. The Recurring Deposit interest depends on the period for which the deposit has remained with the bank. This can differ from the original interest. However, no interest is paid for RDs withdrawn within seven days of opening them.
Can you get a Loan against your RD?
Yes, banks allow you to secure a Loan against your RD.
Can you open a joint RD?
Yes, you can open an RD jointly with another individual.
Is there a provision for partial withdrawals?
Unfortunately, you cannot withdraw your RD partially. You can only withdraw your entire investment prematurely by paying a small fee.
What is the tenure of an RD?
The Recurring Deposit Account tenure can vary from six months to 10 years, and you can choose a tenure based on your investment goals.
Can you change the tenure of an RD?
Once opened, the RD tenure cannot be altered. The date of the instalment also remains fixed and depends on the date you started your deposit.
Does an RD Account have a nominee facility?
Yes, you can add a beneficiary or nominee to your RD Account. You can also alter it anytime.
