Does your friend or relative have an RD? Don’t know what is RD!
You have come to right place to get answer for all queries related to RD. RD is not RD Burman or Reader’s Digest. It’s short form of Recurring Deposit in the financial world.
Recurring deposit is an investment tool which allows account holder in the bank to deposit a fixed amount each month and earn decent interest on the amount deposited. Here are some FAQs that can help you create and operate the RD account with ease.
Who are eligible to open a RD in banks?
Most banks offer Hindu Undivided families and Indians to open RD with them. Some forward thinking banks also offer to open RD account for children with guidance supervision to inculcate saving habits among children.
What is the duration of Recurring Deposit?
Minimum tenure is 12 months and can be maximum be 120 months. It differs from bank to bank.
How much Interest is earned through RD account?
Interest rate differs from bank to bank so check attractive bank rates before investing in recurring deposit.
What is the minimum sum to start an RD?
The minimum sum for monthly installment is Rs 100. When one opens the RD account, minimum amount, interest rate, maturity date and amount is disclosed.
How can I deposit or transfer funds to my recurring deposit?
One can instruct bank to debit the monthly installment amount from one’s saving account or overdraft account
How maturity amount is calculated?
The maturity amount depends on the tenure , type of a/c and installment. The maturity amount of the RD is rounded off to the nearest rupee. It is paid after one month of the last installment or on the expiry of the RD period, whichever is later.
Can I transfer maturity money to any account?
No. It can be transferred to the account from where the amount is debited each month.
What is a penalty if the installment defaults?
Every bank has a different rule for handling penalties. Kindly refer bank website for penalty charges
Can I close RD before maturity date?
If the account holder goes for a premature withdrawal, the rate of interest shall be the one applicable to the time period for which the deposit was with the bank.
Bank charges usually one or two percent extra as penalty charges for premature withdrawal. The ongoing interest rate will be charged.
How to add Nominee in my Recurring Deposit account?
You can simply add the name in the Nominee category while filing the form or add the nominee name online if the RD account is created online.
Does Senior citizen gate additional benefit opening an RD account?
Yes, usually banks offer a higher rate of interest compared to the prevailing rates for Senior Citizens
Armed with the right information, make the most of your RD account today!Tweet