A recurring deposit means making regular deposits. It is a service provided by many banks where people can make regular deposits and earn decent returns on their investments.

“An RD account means a banking or postal service account in which a depositor puts a certain amount of money each month for a set length of time (commonly spanning from one year to five years).” This structure is for people who want to put down a set amount each month with the goal of receiving a payout after a few years.

How does a Recurring Deposit account work?

An ordinary fixed deposit implies that a person sets aside a sum of money that can be withdrawn after a set length of time. Meanwhile, you are unable to alter the sum of the money or possibly supplement it.

The recurring deposit follows a similar procedure with one primary difference. Instead of investing a lump sum, you should deposit a specific amount into your account each month, which you determined when you opened your RD account. This could be a tiny sum that won't completely empty your wallet. And when the sum matures, you'll have a large sum in excess of your principal, plus interest.

RD Features
Interest Rate between 5% to 8% (variable from one bank to another)
Minimum Deposit Amount from Rs.10
Tenure of Investment from 6 months to 10 years
Frequency of Interest Calculation every Quarter
Mid-term or partial withdrawal is not allowed
Premature account closure allowed with penalty