Monthly deposits, interest rates like FDs - This is what Recurring Deposits account can give you; SBI vs HDFC Bank vs ICICI Bank
Offering flexibility in savings, RD helps depositors who have regular income and are unable to carry bulk deposits.
Recurring deposits are specially meant for those who are not in position to avail a fixed deposits account. The difference between these two investment option is that, the former allows regular deposits on monthly basis while the latter requires a fixed amount to be deposited for a tenure of choice. The RD is popular for providing interest rates like FD on small investments and meant for those who do not have lump sum. Offering flexibility in savings, RD helps depositors who have regular income and are unable to carry bulk deposits.
Here’s what major banks are offering you for having RD account:
State Bank of India (SBI):
- Monthly deposits of Minimum Rs.100/- and in multiples of Rs 10/- No maximum.
- Minimum period 12 months maximum 120 months.
- Rate of interest as applicable to Bank's TDR / STDR for the period of the RD.
- Loan / Overdraft up to 90% available against the balance in RD account.
- TDS is applicable.
- Premature withdrawal allowed and for this, rules for TDR/STDR is applicable.
- Nomination facility available and it is advised to avail of the facility.
- Passbooks are issued
As said interest rate you earn on FDs are also given on RDs, hence a customer can earn 6.80% at SBI for tenures between 1 year to 5 years. For similar period, senior citizen interest rates vary from 7.20% to 7.50%.
- For a much smaller investment per month, get interest rates equal to that of regular Fixed Deposits.
- An investment as small as Rs. 1000 (and in multiples of Rs. 100 thereafter) or as large as Rs. 14,99,900 per month.
- A minimum tenure of 6 months (and in multiples of 3 months thereafter) up to a maximum tenure of 10 years.
- Ease to submit 15G/H form through Netbanking.
- Can convert RD into an FD at maturity.
- Nomination facility available while booking deposit online.
A 7.40% rate is given for deposits made on tenures like 27 Months and 36 Months. Here a senior citien gets 7.90% interest rate each. For 12 months, 15 months and 24 months tenure, HDFC Bank offers 7.30% interest each. While senior citizen gets 7.80% each.
- Deposit a minimum of Rs. 500 per month and thereafter, deposit in multiples of 100.
- Make deposits for a minimum period of 6 months and thereafter in multiples of 3 months. Maximum tenure of Recurring Deposit would be 10 years.
- Loan against deposit facility available.
RD with monthly income option:
- You will do regular payment of your RD to build a corpus. On maturity the amount that gets accumulated (RD instalments + Interest) will be invested in an Annuity FD.
- It is a phase where you will receive the benefits of the amount you have invested along with the interest on a monthly basis.
- The accumulated corpus will be reinvested and payout will be given to you with on monthly basis along with the interest.
- The Investment phase will be for a minimum period of 24 months and in multiples of 3 months. Maximum will be 8 years.
- The minimum value of instalment is Rs 2,000 per month and thereafter in multiples of Rs 100.
You can earn 7.10% interest rate each for deposits tenure of 15 months to 24 months. Here, a senior citizen gets 7.60% rate. While for opting higher tenures like 27 months, 30 months, 33 months and 36 months - a person can earn 7.50% rate. For these tenure, a senior citizen will get a hefty 8% interest rate each.
Thereby, if you believe you cannot afford a lump sum investment, then RDs can always be your answer for investment. On maturity you can also reinvest the amount in FDs and earn furthermore interests.