The recurring deposit account is subject to tax deducted at source, said SBI.
State Bank of India (SBI), largest lender of country, offers option of opening a recurring deposit (RD) account that allows customers to save a fixed sum every month and earn an interest income on same.
Interest rates offered on recurring deposits (RDs) are same as that on fixed deposit (FD) accounts, noted lender on its corporate website- sbi.co.in.
The difference is that in case of FDs, customers have to deposit amount and keep it blocked until a fixed maturity period.
While in case of RDs, customers can deposit sum every month and thus RDs help them their build their savings through regular deposits.