Recurring Deposit – Get information about RD Account in India, RD Benefits, RD Interest Rates, Recurring Deposit Eligibility, RD, RD Rates in India.
WHAT IS A RECURRING DEPOSIT ACCOUNT ?
A recurring deposit account is a personal banking deposit product offered to the depositors in order to save money by paying the principal amount in instalments. RD accounts provides similar returns to fixed deposits. This type of term deposit when held until maturity period can give returns upto 8.3%. The scheme is offered by almost every bank. For the people who do not have a huge amount to invest in one go can definitely think of depositing money in RD account.
FEATURES & BENEFITS OF RD OFFERED BY BANKS
- Investment made can be as small as Rs. 1000.
- The return rates of Recurring deposit is almost same as fixed deposit.
- These are the fixed monthly deposit. One can pay in break up of total investment amount rather than investing a lumpsum amount like fixed deposits.
- Minimum monthly instalment starts at Rs. 100 or even Rs. 50 which are flexible i.e The instalments can be deposited one or more times in a month.
- Funds will be transferred to from savings account to RD account on monthly basis making it a hassle free process.
- Nomination facility is available.
- Recurring deposit facility is also available to NRIs.
- Loan against deposit facility can be availed by the depositor ( 75% – 90% of the deposit amount).
- Pre mature withdrawal can be done with a penalty attached to it.
- Schemes under recurring deposits are also available.
Minimum time period for depositing money in recurring deposit account is 6 months upto a maximum of 10 years. However, the minimum period may vary from bank to bank. Like SBI RD account comes with a minimum time period of 1 year to stay in the RD account.
- An individual
- Indian Citizen
- More than one person in their joint names
- Charitable & educational institutions
- HUF (Hindu Undivided Families)
- Blind persons
- Illiterate persons
- Partnership firms
- Companies, clubs & societies
- Application form of the bank
- ID Proof (Passport, PAN card, Driving license, Voter ID)
- Address Proof (Telephone bill, Electricity bill)*
- Latest passport sized photograph of the depositor(s)
*Related documents depending on the bank‘s satisfaction.
WHAT IS A FlexiRD ?
Flexi RD is a part of recurring deposit which provides the flexibility to the customer of choosing monthly flexi instalments. Such accounts have its own benefits to the depositor. Loans against deposit facility is also available from various banks.
The Flexi RD culminates the habit of saving money in small bits and pieces to meet the needs of future.
NRO / NRE RECURRING DEPOSITS ACCOUNTS
RD accounts can also be opened by NRIs (Non Resident Indians). There are two types of accounts under the category.
NRO RD ACCOUNT – these are the non resident ordinary account in which the interest earned is taxable. NRO RD account can be opened by an individual or NRI jointly or NRI along with an Indian citizen. These are the rupee accounts opened for depositing incomes.
NRE RD ACCOUNT – NRE Account is a Non – Residential External Account for NRIs to transfer foreign earnings to India. The interest earned on these type accounts are tax free. The account can be opened by an individual NRI or two NRIs jointly.
However the documents required for the NRI account are mentioned below.
- Copy of passport & residence visa
- A valid document indicating foreign residential address
- Passport sized photograph
- Proof of NRI status by means of Employment/Residence Visa copy or Work/Residence Permit and PAN Card/Form 60 issued in India.
(The applicant is to be duly introduced by Banker/ Notary Public/ Indian Embassy/ Local customer who has been subjected to full KYC Procedure).
PENALTY CLAUSE FOR PRE MATURE WITHDRAWALS IN RD
Recurring deposit comes with many benefits and one such benefit is the facility of pre mature withdrawal. Of course, The facility comes with the deduction of penalty. Some banks deduct 1% (Upto 2% in some banks) from the calculated interest rate for pre mature withdrawal. However, If the account holder withdraws before the minimum tenure then he/she would earn zero interest return and only the base or principal amount will be refunded.
TAXATION ON RD
TDS (Tax Deducted at Source) is applicable for Recurring deposits on the interest earned. To avoid TDS being deducted on the RD account one needs to submit Form 15G. The tax will be paid according to the tax slab of the account holder. (TDS at 10% of interest is applicable).
PAN details is mandatory as if the account holder is unable to show the PAN then the TDS will be levied at the rate of 20% of the interest earned.
List of Banks
|SBI||PNB||Standard Chartered Bank|
|HDFC Bank||Syndicate Bank||Federal Bank|
|ICICI Bank||Allahabad Bank||Bandhan Bank|
|AXIS Bank||Andhra Bank||IndusInd Bank|
|Kotak Bank||Bank of India||Jammu and Kashmir Bank|
|IDFC Bank||Bank Of Maharashtra||CitiBank|
|Bank of Baroda||Canara Bank||HSBC Bank|
|Corporation Bank||Central Bank of India||Yes Bank|
|IDBI Bank||Dena Bank||United Bank Of India|
|Indian Bank||Punjab & Sind Bank||RBL Bank|
|India Overseas Bank||UCO Bank||Dhan Laxmi Bank|
|Vijaya Bank||Union Bank of India||Karnataka Bank|