Recurring Deposit Scheme

Recurring Deposit Scheme
Recurring Deposit Scheme

A recurring deposit scheme is a special deposit account which helps people to deposit fix amount every month in their account and earn interest at the rate applicable to the account. It is a monthly installment scheme. Recurring deposit scheme allows customers to an opportunity to make their savings through regular monthly deposits of a fixed sum over a fixed period of time. The minimum period of recurring deposit scheme is six months and the maximum is ten years.

A recurring deposit scheme is available in banks, post office, co-operative society. The interest rate and the term of the scheme are different in each place. When this account is opened, the maturity value is fixed considering that the customer will pay all monthly installments regularly. However, if the customer fails to pay the installment of a fixed amount, he has to pay the amount of that month installment with a default fee or this will be deducted from his maturity amount. These deduction rules are different in different places. The loan facility is also available in this scheme.

Recurring deposit scheme
Middle-class family dream completing a scheme

Recurring deposit scheme of Post office

India post has many types of saving schemes for people but out of the recurring deposit scheme is very famous. It is very useful for the middle-class family. By using it, they can save a small amount of money for five years and get some amount together. So that they can do them some social work using this amount. In the Department of India post, this scheme is known as “National Savings Recurring Deposit Account” and “5-years Post Office Recurring Deposit Account (RD)”.

Basic information

  • Interest rate is 7.2 per annum (quarterly compounding)
  • On maturity Rs.10/- account get Rs.725.05/- and it can be continued for further five years on year to year basis.
  • Minimum INR 100/- per month and no maximum limit.
  • The people can open an account as following
    1. A single adult
    2. Joint account (Maximum three adults)
    3. Minor above 10 years of age
    4. A guardian on behalf of a minor or a person of an unsound mind

General information

  • One can open an account by cash or cheque and in case of a cheque, the date of deposit shall be the date of clearing of a cheque.
  • Nomination facility is available at the time of opening of the account and after the opening of the account.
  • The account transfer facility is available from one post office to another post office.
  • One can open any number of the account in any post office.
  • If the account opening date is before 15 of the month, the installment has to pay before the 15th of the month and If the account opening date is after 15th the month, the installment can pay up to the last date of the month.
  • If an account holder does not pay the subsequent deposit in the prescribed time limit, then the default fee @Rs.1/- per every 100 rupees is applicable. After four regular defaults, the account becomes discontinued and the holder can revive it within two months but if he fails to revive then no further deposit can be made.
  • If any RD account, there is the monthly default amount, the depositor has to pay the defaulted monthly deposit with default fee and then pay the current month deposit.
  • Rebate facility is available on at least six months’ advance deposit. Rebate of Rs.10/- for 6 months and Rs.40/- for 12 months advance deposit is available for Rs.100/-.
  • On attaining the age of majority, the minor has to apply for conversion from minor to major.
  • 50% of the deposit amount withdrawal facility is available. The depositor can repay the amount in one lump sum with interest at any time during the currency of the account.
  • The online deposit facility is available through mobile / net banking / IPPB.
  • An agent facility is available.


For more information visit the India Post official website.

To get an overview of the post office recurring deposit scheme, please visit my website

Recurring deposit Scheme of State bank of India

State Bank of India is one of the best-nationalized banks in India. There are many saving and investing schemes available in SBI but out of them, Recurring Deposit Scheme is the best scheme. Because it is available for the year from 7 days to 10 years. More detail of the scheme is as under.

  • A minimum deposit of the RD account is Rs.100/-.
  • The account holder can open an RD account for the period from 7days to 10 years.
  • Late Penalty:- Rs.1.50/- per Rs.100/- per month (Tenures of 5 years or less) & Rs.2/- per Rs.100/- per month (Tenures more than 5 years).
  • Bank offers an interest rate on the deposit below Rs.2 crores is between 4.50% p.a. to 6.25% p.a. and .50% additional interest to Senior Citizens.
Tenure (Term) Interest Rates (p.a.) for Public Interest Rates (p.a.) for senior Citizens
180 to 210 days 5.80% 6.30%
211 days to less than 1 year 5.80% 6.30%
1 to 2 years 6.50% 7.00%
2 to 3 years 6.25% 6.75%
3 to 5 years 6.25% 6.75%
5 to 10 years 6.25% 6.75%
  • Note:- Above interest rates are effective from 15.02.2020.

For deposit above Rs.2 crores, interest rates are as under.

Tenure (Term) Interest Rates (p.a.) for Public Interest Rates (p.a.) for senior Citizens
180 to 210 days 5.70% 6.20%
211 days to less than 1 year 5.70% 6.20%
1 to 2 years 6.30% 6.80%
2 to 3 years 6.00% 6.50%
3 to 5 years 5.75% 6.25%
5 to 10 years 5.75% 6.25%
  • Note:- Above interest rates are effective from 10.09.2019.

Recurring Deposit Scheme in Credit Co-operative Society

  • Credit society offers different interest rates as per their own custom rules.
  • They offer mostly one year to two years of a recurring deposit scheme.
  • They offer interest rates from 6.50% to 8%.

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