The Recurring Deposit scheme, like all other investment avenues, comes with its own set of benefits and they are:
- In recurring deposit, you invest a fixed amount every month. It is very similar to paying the EMI. You can start with less amount. In many banks you can start it with monthly investment of as low as Rs. 100/-.
- You can go for a recurring deposit option for a fixed tenure. In most of the banks, you may choose maturity period ranging from 6 months to 10 years.
- Rate of interest in a recurring deposit is fixed. It remains the same for the entire duration of the recurring deposit. This interest rate varies from bank to bank and tenure of recurring deposit. Most of the banks offer it between 3.75% and 9.5%.
- Minimum amount of Deposit is Rs.10. No maximum limit. Deposit should be made every month within the calendar month. Default fee is chargeable for delayed deposit at 0.20 P. per month of delay, for Rs. 10 Denomination.
- Maximum defaults allowed in an account is four (4). After four defaults the account is treated as ‘discontinued’. Discontinued account can be revived by paying defaulted deposits, within two months from the fifth default. If it is not so revived, the account cannot be continued.
- For advance deposits, including deposit for current month, rebate is allowed at the rate: Denomination Rs.10. 6 advance deposits…….Re.1/- 12 advance deposits: 4/-.
- Premature closure is permitted on completion of 3 years from the date of opening. Interest is to be calculated as per the rules and rate applicable to individual savings account. at the rate applicable to savings account from time to time is calculated and paid.