What you should know about recurring deposits | Fusion - WeRIndia

If you want save money on a monthly basis, recurring deposits (RD) is a good choice to do so. When you start a recurring deposit, a fixed amount would be transferred from your savings to the deposit on a monthly basis. You will be paid the principal and interest after the tenure. Here are some things you should know about RDs.

Tenure

The tenure for RDs vary from 6 months to 120 months. You can withdraw the money prematurely with a penalty. However, you cannot do a partial withdrawal.

Amount

You can start with money as low as Rs.100 and go in multiples of 10. There is no upper limit for this in government banks.

Eligibility for recurring deposits

Recurring deposits can be opened by Resident individuals Hindu Undivided Families Private & Public Limited Companies Trust & Societies.

Taxation

If interest is payable or reinvested in an RD as per customer across all branches exceeds Rs. 10,000, then TDS will be applicable.

Payment options

If you have set an installment amount, it generally cannot be altered at any later date. You will get the interest only on maturity along with the principal.

Default payments

It is important to know that if you fail to pay installments frequently and six installments are in arrears, then the bank has a right to close your account.

Image by kalhh from Pixabay (Free for commercial use)

Image Reference: https://pixabay.com/fr/illustrations/investir-usine-d-argent-1346104/