Recurring Deposit Account

The Recurring Deposit account has a minimum lock-in period of one month. In the case of premature closure within a month, no interest shall be paid to the depositor and only his principal amount shall be returned. Interest is paid only on maturity. With Recurring Deposits, you can set up automatic deposits into your SoFi Invest account at a frequency of your choice. This is a great way to make investing a habit and save for the long-term. To initiate a new recurring deposit: Within the app or web browser, once logged in to your Invest account.

What is a Recurring Deposits Account?

The Recurring deposit account is an account in the bank or in a Post office where a depositor deposits a preset amount of money every month for a fixed time period (generally ranging from one year to five years). This format is meant for persons who would like to deposit a fixed amount every month, with the purpose of getting a lump sum after a few years. The little monthly savings in the Recurring Deposit plan allow the saver to build up an attractive sum on maturity. Interest rate in this kind of deposit scheme is calculable on quarterly compounded based.

How does Recurring Deposits account works?

An average fixed deposit ensures that a person allocates a sum and in a particular period of time, you can withdrawal this amount. Meanwhile, you don’t have access to touch the amount of sum or maybe complement this. The recurring deposit operates over an equivalent process. The main difference in this kind of scheme is instead of depositing a bulk amount you should submit a specified amount in your account, which you decided at the time of opening of your RD account, each month. This amount could be a small amount that can’t blank your pocket much. And at the time of maturity you will have a big amount over your principle amount including the interest.

How to open a Recurring Deposits account

You can open a RD account by visiting any bank/post office and filling up the form, by providing some other formal documents like PAN Card & residential proof that is used for opening an RD and pay the first month’s money to the bank/post office.

One can open a recurring deposit for a period of as less as 6 months or in multiples of 3 months with a highest term of 10 years. The interest rates presented under a Recurring Deposit is alike to the rates given under fixed deposits. If one is a senior citizen, then 0.5% extra rate of interest is granted, similar to India post & some banks also give a facility of grace period as well, which is about to 5 days.

Recurring Deposit Account Definition

Can you break Recurring Deposit?

Yes, you can break a recurring deposit. The bank/post office cannot decline that. But, the bank/post office has the right to retain/cancel the interest unpaid on it because you are not letting the recurring deposit complete or finish its complete term. You may get the sum you deposited but not any interest.

Advantages of Recurring Deposit are

• Fixed monthly investment.
• Fixed duration.
• Fixed rate of interest.

Disadvantages of Recurring Deposit are

Recurring Deposit Benefits

• You cannot withdraw the money anytime you wish.
• You cannot change the amount you like to invest monthly once decided.
• It has a comparatively lower rate of interest.

Recurring Deposit Usa

Source:Fintiger.com