Recurring deposits (RDs) offer option of investing small portion of money unlike fixed deposits (FD).
A recurring deposit (RD) helps one build savings through regular deposits over a fixed period of time.
RD accounts offer you the option of investing a small portion of your money unlike fixed deposit (FD) accounts, which require you to block your money until a given period of time.
"Recurring deposit is a good scheme for risk-averse investors who are unwilling to take any risk on their investment.
These schemes allow them to accumulate certain funds without any risk and worry.
On maturity, the individual will be paid a lump sum amount which includes the regular, periodic investments and the interest earned on them," said Abhinav Angirish-Founder-www.investonline.in.State Bank of India (SBI), the largest lender of the country, has recently revised its fixed deposit interest rates.
The interest rates on its recurring deposits are the same as those on its fixed deposits.
Post offices also offer the option of opening an RD.Given below is a comparison of interest rates on recurring deposits offered by SBI, post offices:Interest rates offered by SBI on recurring depositsSBI requires customers to make monthly deposits of minimum Rs.100 and in multiples of Rs 10, according to sbi.co.in.
There is no maximum limit.
The minimum period of SBI RDs is 12 months and the maximum is 120 months.(All figures in % per annum)TenorsExisting for Public w.e.f.
28.03.2018Revised For Public w.e.f.
28.05.2018Existing for Senior Citizens w.e.f.
28.03.2018Revised for Senior Citizens w.e.f.
28.05.20187 days to 45 days5.755.756.256.2546 days to 179 days6.256.256.756.75180 days to 210 days6.356.356.856.85211 days to less than 1 year6.46.46.96.91 year to less than 2 year6.46.656.97.152 years to less than 3 years6.66.657.17.153 years to less than 5 years6.76.77.27.25 years and up to 10 years6.756.757.257.25Interest rates offered on recurring deposits by post officesPost offices allow you to open recurring deposit accounts via cheque/cash, according to India Post's website indiapost.gov.in.
Any number of accounts can be opened in any post office and can also be transferred from one post office to another.Post offices offer 6.9 per cent interest rate per annum (quarterly compounded).
On maturity, a Rs 10 account fetches Rs 717.43.
Post offices RD accounts can be continued for another five years on year-to-year basis.Post offices also offer fixed deposits, national savings certificates, senior citizen savings schemes, Sukanya Samriddhi Accounts, public provident fund accounts, savings accounts, Kisan Vikas Patra, and a monthly income scheme account.