A recurring deposit, or an RD, is a type of term deposit, which allows for a more flexible saving plan as compared to a fixed deposit. All you need to do is invest a predetermined amount each month, which will earn you interest, and will be given to you at the end of the tenure of the deposit.
This investment option is particularly useful for salaried employees, who may not have a sizeable amount to save after all of their monthly expenses. Recurring deposits can be opened and maintained for six months to 10 years, allowing you to choose a convenient option based on your financial requirements.
A few features and potential benefits of a recurring deposit include:
Interest - The money that you’re saving stays stagnant if you put it into a savings account. However, with a recurring deposit, you can earn interest and make money on your savings
Tenure - Based on your needs, you can choose your tenure, ranging from as short as six months to 10 years
Loan Options - If you hold a recurring deposit, you can use it as collateral to apply for a loan. An individual can take a loan of 80 to 90% of the value of the deposit
Here’s how you can open a recurring deposit:
Essentially, you can open a recurring deposit in two ways – online and offline.
One way is to visit your nearest YES BANK branch and fill out the required forms and submit your documents, after which you can make the first deposit and open your account. Another way is through netbanking, using which you can log into your online account and open a recurring deposit.
Once you’ve opened your recurring deposit, you can visit the branch and pay before the monthly due date. Alternatively, you could set standing instructions with your bank, and they will deduct the monthly amount from your savings or current account on the due date.