Asked

How does recurring deposit work?

Daneel

The banks offer a Recurring Deposit which is a different kind of Term Deposit in our country. It helps to those people who have regular income for depositing a fixed amount of rupees each month in their recurring deposit and receive interest which is applicable for Fixed Deposits. Recurring Deposits is same as making Fixed Deposits in a definite amount for monthly installments. This type of deposit matures on a definite date received every month with all the deposits. This scheme allows consumers to make their savings through regular deposits in every month with a fixed amount in a definite period of time. The minimum period of Recurring Deposit is 6 months and maximum period is 10 years.

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The consumers of the banks are sponsored to the Recurring deposits to withdraw a certain amount of money from his Saving or Current account and credit to the Recurring Deposit account.

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Functions of Recurring Deposit:

First of all, apply the recurring deposit and request the bank for deducting the specified amount from the current or savings account in each month.  The amount can also be paid by internet banking. The recurring deposit in the majority of the banks offer for investment as minimum Rs 5 in government banks or Rs 500 in private banks. The date of periodic (monthly) payments will depend on the date of opening the account in a bank. After this, the user will get a passbook which has information of all the transactions. The user can also have a personal or joint account with any family member.

When a customer opens the account in bank, first of all check detail of the recurring deposit facility and also gain information about the interest rates, convenience in operating, online deposit facility and tenure of the investment of amount such as minimum period of 6 months and up to a maximum period of 10 years.

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