Meaning of Recurring deposits
Recurring deposit account is generally opened for a purpose to be served at a future date. Generally it is opened to finance pre-planned future purposes like, wedding expenses of daughter, purchase of costly items like land, luxury car and refrigerator or air conditioner.

Eligibility of Recurring Deposit account
Recurring deposit account is opened by those who want to save regularly for a certain period of time and earn a higher interest rate. Recurring Deposit scheme is offered by almost all banks (RD schemes of SBI, PNB, ICICI Bank, HDFC Bank, IDBI Bank, Bank of India, Bank of Baroda, Corporation Bank) in one form or the other. Recurring Deposit is very popular among the salaried class, especially who can afford to save only few hindered or say few thousand rupees per month.

This scheme is a boon for people who do not have a large amount of savings and thus cannot use the Fixed Deposit scheme of the banks. Under this scheme, the customer deposits a minimum amount (normally fixed) every month and bank pays the interest at the pre-determined rates (which is usually the same as applicable to fixed deposits).

At the end of the period i.e. on maturity date, the customer is paid the maturity value i.e. principle deposited and the interest payable. In recurring deposit account certain fixed amount is accepted every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.

Features of Recurring Deposit Account
The main features of recurring deposit account are as follows:-
• The main objective of recurring deposit account is to develop regular savings habit among the public.
• In India, minimum amount that can be deposited is Rs.10 at regular intervals.
• The period of deposit is minimum six months and maximum ten years.
• Higher rate of interest is charged by the bank.
• No withdrawals are allowed. However, the bank may allow closing the account before the maturity period.
• The bank provides the loan facility. The loan can be given up to 75% of the amount standing to the credit of the account holder.

Advantage of Recurring Deposit Account
The advantages of recurring deposit account are as follows:-
1. Recurring deposit encourages regular savings habit among the people.
2. Recurring deposit account holder can get a loan facility.
3. The bank can utilize such funds for lending to businessmen.
4. The bank may also invest such funds in profitable areas.

How to apply for Recurring Deposits
You can open a Recurring Deposits(RD) account with any bank, be it nationalized, private or foreign and make the deposit.
Many major banks now provide the option of creating a RD online.

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