Best Recurring Deposit Scheme

Banks offer unique term deposits, which are known as Recurring deposits or RD. This works as an investment tool that lets one make regular deposits to get decent returns on them. Thus, these deposits hold a degree of interest with complete flexibility and ease of use. The account holder has to make the deposits of a particular amount each month to ensure they will have enough in future to meet any emergency.

A person can take a loan from 70% to 90% based on the deposit amount. However, the rest depends on the bank's individual terms and conditions. It is always advisable to take loans on the deposits as you will keep getting interest amount credited on the deposit as well. This lets you lower down your interest rate on the amount borrowed.

Features of an RD Account

  • It makes a person get habitual to regular saving and deposits in the bank.
  • One can start with a minimum amount of Rs. 10 as a deposit. However, the terms and condition vary from bank to bank.
  • The minimum duration for deposits is 6 months which can be availed for as long as 10 years.
  • The interest rates are equivalent to that of the fixed deposits which ensures you earn better than the saving scheme.
  • No premature or withdrawals in the mid are permissible. The bank can, however, close the account before maturity, however, imposing an amount of penalty.
  • There are additional benefits to such account holders. Individuals can avail loan where the 80-90% amount of deposit value can be availed.
  • The recurring deposits are funded periodically. The person has to follow standing instructions given by the bank to credit recurring deposit account each month from his savings or current account.


The customers can open an RD account where the interest rates are compounded quarterly. The term initiates from 6 months. This can be changed further to 3 months with a maximum period of 10 years. The minimum tenure would, however, vary from bank to bank. Some might have 24 months as the minimum duration.


The Indian residents and Hindu Undivided Families (HUF) can avail this opportunity. The banks also offer RD schemes to minors and kids under the supervision of their parents or guardians.

Interest rates

The banks offer compound interest on a quarterly basis. The interest is added to the principal amount. The next interest will be compounded on the both the principal as well as the prior interest.