Recurring deposits (RD) with banks are one of the most popular
investment options for people with regular income. RD enables to deposit
fixed amount every month for a pre-defined period which earns interest
similar to Fixed Deposits (FD).
All about Recurring Deposits:
- Most banks offer RDs for tenure of 6 months to 10 Years
- The tenure of RD can be in multiple of 3 months
- The amount of installment and number of installment cannot be changed after opening of the account
- The interest on RD compounds quarterly
- In most cases the interest rate on RD is similar to Fixed Deposits offered by Banks for similar tenures. However some banks like Bank of India gives 0.5% extra interest rate for RD as compared to FD for similar tenure
- The minimum deposit amount can be as low as Rs 100 per month, though some banks may have higher limit
- There can be penalty for missing even one installment.
- In case you miss multiple installments the RD can be closed and amount returned to you
- Most banks offer Loan/Overdraft against the amount available in Recurring Deposit. The interest is generally 0.5% to 1% more than that offered to RD.
- There are penalty clauses for pre-mature withdrawal similar to Fixed Deposits
Recurring Deposit Interest Rates:
Following are the highest Interest rates on Recurring Deposits based on duration:
- For RD duration of 1 Year The Ratnakar Bank & Bandhan Bank offers 8.50%
- For 2 years The Ratnakar Bank offers 9.0% and Bandhan Bank offers 8.50%
- For 3 to 4 Years the best offer is by The Ratnakar Bank offering 8.75% interest rate
- For 5+ Years RD duration the best interest is offered at 8.75% by The Ratnakar Bank and 8.05% by Tamilnad Mercantile Bank Ltd
- The Post Office offers 5 Year Recurring Deposit Scheme offering 8.4% interest rate.
Disclaimer: The
Recurring Deposit Interest Rates keep on changing. You are advised to
check the interest rates with banks before making your RD.
http://apnaplan.com/highest-interest-rate-on-recurring-deposits-rd/
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