RD - Recurring Deposit

A Recurring Deposit, commonly known as RD, is a unique term-deposit that is offered by Indian Banks. It is an investment tool which allows people to make regular deposits and earn decent returns on the investment.  Due to the regular deposit factor and an interest component, it often provides flexibility and ease of investments to users/individuals.

However, it is essential to know that RDs are different from Fixed Deposits/FDs . RDs are flexible in most aspects. An RD account holder can choose to invest a fixed amount each month while earning decent interest on the amount. RDs are an ideal saving-cum-investment instrument.

Most major banks in India offer Recurring Deposit Accounts, with a term that often ranges between 6 months  to 10 years, also providing individuals with the opportunity to choose a term according to their needs. However, the interest rate, once determined, does not change during the tenure; and on maturity, the individual will be paid a lumpsum amount which includes the regular investments as well as the interest earned.