Recurring deposits are among the most popular risk-free investments in India. An RD is an investing tool for those who get regular salaries, wherein a certain sum of money is deposited each month into the account for a predetermined period of time. By opening an RD account, one can receive interest at a rate that ranges from roughly 2.50% to 8.50%. Although the interest rates on RDs are comparable to those on fixed deposits, RDs stand out due to the flexibility of monthly installments. A fixed deposit can have a minimum duration of six months or as long as ten years.

Types Of Recurring Deposit Interest Rate 

Here are the types of Recurring Deposit Interest Rate : 

Standard RD Savings Plan

Indian banks allow customers who are at least 18 years old to make regular deposits. Customers have the option of selecting a fixed monthly payment for a period ranging from six months to ten years. Either a simple or complicated formula can be used to compute interest. At the conclusion of the term, a customer may withdraw the lump sum payment. The minimum monthly deposit required to create an account under this scheme is Rs. 10, and the interest rates typically vary from 7% to 8% per year.

RD Plans for Children

Furthermore, banks have a programme that allows minors to open an account. This account can be opened by parents or guardians for their kids so they can start saving money for their future, their education, and other requirements. The most significant aspect is that the returns on this investment may be higher than or equal to those of conventional RD schemes. Young people are taught to save through these programmes.

Age-Related Development Programmes

Senior citizens can take advantage of RD programmes at a rate of interest that is relatively higher, as was previously noted. The typical range of interest rates is 7.5% to 9.25% annually, which is on the higher end of the spectrum. Additionally, several programmes are offered to assist senior individuals in planning their retirement.

Recurring Deposit Plans for NRE/NRO

Non-Resident External Accounts (NRE) and Non-Resident Ordinary Accounts (NRO) could provide a reduced interest rate. Additionally, NRE/NRO accounts for seniors are not eligible for higher interest rates.

Feature of Recurring Deposit Interest Rate 

The following list of recurring deposit's key characteristics includes:

• No need to deposit a large amount of cash all at once. You have the freedom to choose the appropriate quantity, which can be as little as 10.

• One can select the deposit's tenure, which can be anything between six months and ten years.

• Almost identical to fixed deposit interest rates are available for RDs.

• Minors may open accounts through the RD scheme while being supervised by their parents.

• Senior people enjoy preferential treatment with higher interest rates—typically 0.50% more than those charged to other citizens.

• In RDS, premature and partial withdrawals are permitted, but there are additional fees

• You can also receive loans using an RD account as security. Typically, the loan-to-value ratio is between 80 and 90 percent.

Eligibility Criteria of Recurring Deposit Interest Rate 

Similar to other term deposits, there are the same requirements to open an RD at a bank or Post Office. 

• The following people qualify to open an account: 

• Individual with a savings account

• Children under the age of 10

• Minor under natural or legal supervision who is under the age of 10

• A business entity, such as a corporation or partnership.

• An agency of the government

Documents Required for Recurring Deposit Interest Rate 

Here are the documents list that you to required: 

Identity Proof: 

• Passport

• A PAN card

• ID for voting

• A driver's licence

• Identification from the government

• Picture ration card 

• ID card for seniors

Address proof: 

• Passport

• A telephone bill

• Bill for electricity

• A check and a bank statement

• Postal Service-issued document/ID card

Conclusion 

Due to its structure, which allows for monthly installment investments as opposed to lump sum investments, RD accounts are a type of term deposit that are well-liked by small investors. Start small—as little as Rs. 100 will do—and work your way up to alert customers that term deposit interest rates are higher than those of standard savings accounts. In addition, as your RD account expires at maturity, you get to benefit from all fixed deposit advantages but renewal.