We all have an idea about savings deposit but when it comes to other deposits, we get confused. Banks offer several options to us so that we can save a little for the future or for an emergency. It is better to get an idea about other options too so that we can choose the best one. Here is some step by step guide to set up a recurring deposit.
What is a recurring deposit?
It is a kind of term deposit where one can deposit a fixed amount every month for a certain period of time. The rate of interest availed, however, would be that of a fixed deposit. It is useful for those who have a fixed monthly income. There is a fixed period of time for every recurring deposit. It allows the customer to save a huge amount with a small investment every month.
There is another way of recurring deposit, in which the customer gives a standing instruction to the bank to withdraw money from any savings or current account and debit that in the recurring deposit.
One can open a recurring deposit account online, by following below mentioned steps.
- Log in to your net banking
- Click on e-RD or Standard Chartered recurring deposit
- Your all bank account will be shown, select the one which you want to link with your recurring deposit.
- Choose the monthly installment and tenure amount.
- If you are a senior citizen then there will be an additional interest rate for you, so select the senior citizen option (only if applicable).
- Read the terms and conditions thoroughly. If done click on submit.
- Fill up all your details that are required.
- Check once again
- Click on confirm and your recurring deposit will be created.
- You will get a reference id and an e-RD account number.
- You also can take a copy of e-RD details like a soft copy or you can print it.
- You also can set a Standing Instruction or SI online, you will also get an option for that.
For different banks, the process is different. We are helping you with a general process.
- Whenever you will go to open a recurring deposit a standing instruction will be set with the debited installment from the savings account on an every month basis for a fixed tenure time.
- On the day of opening the recurring account, the first installment will be debited from the particular savings account. After that on the specific mentioned date on the standing instruction, the amount will be deducted.
- The minimum amount is 500, you can choose any amount, which is a multiple of 100.
- If you have enough funds in your account only then a recurring deposit can be created.
- One also can register a nominee by visiting any branch of the banks with the nomination request form.
- If due to any issue your mentioned savings account does not contain enough balance to credit in your recurring deposit on the mentioned date, the interest rate will vary in that case. A penalty also can be charged with a certain rate.
- The minimum tenure period of any recurring deposit is of six months and can be extended up to ten years but the duration should be a multiple of three.
- If one withdraws the recurring deposit amount before it matures, then the interest will be calculated on the time duration for which the amount was in the bank. The withdrawer also needs to give a penalty at a certain rate.
- After maturity, the net amount of the recurring deposit will automatically get credited to the savings account that was mentioned in the standing instruction.