Recurring deposit (RD) accounts can be opened in banks by investors with regular incomes. A recurring deposit (RD) requires an investor to make regular deposits and earn an interest income on the same at an interest rate equivalent to that on fixed deposits (FDs). Unlike FDs, however, RDs do not require fixing a particular deposit with the bank until a given maturity date. RDs enable customers to save their money and build their savings through regular deposits over a fixed period of time. State Bank of India (SBI), the largest lender in the country, offers the option of opening recurring deposits.
Here are key things to know about SBI's recurring deposit (RD) accounts, as stated on teh bank's corporate website, sbi.co.in:
Features of RDs
Customers need to make monthly deposits of a minimum of Rs 100 and in multiples of Rs 10. There is no maximum limit on the deposits.
The minimum period of RDs is 12 months while the maximum is 120 months.
State Bank of India RDs offer the same interest rate on as applicable to TDR (term or fixed deposits) and STDR (special term or fixed deposits).
A loan or overdraft up to 90 per cent is available against the balance in RD account.
Tax deducted at source is applicable on RDs.
A premature withdrawal is allowed on RDs and for this, rules for TDR or STDR (special term or fixed deposits) are applicable.
A nomination facility is available on RDs and it is advised to avail of the facility, said SBI.
Passbooks are issued for RD accounts.
Interest rates offered on recurring deposits (RDs) of SBI:
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