How to Open a Recurring Deposit Account?
21 Mar 2023
Table of Content
What is RD account is pretty clear but how to open recurring deposit account? For opening an RD account, the investor needs to visit the nearest bank or post office and fill out the application form. Certain basic documents shall be provided like identity documents, address proofs, bank detail etc.
How to Open Recurring Deposit Account in Bank?
Opening a recurring deposit account is an extremely simple process. To make it easy for all types of depositors, banks have made it possible to open an RD account online and offline.
How to Open RD Account Online:
It is very convenient to open an RD account online via net banking . Before opening an RD account, it is important to check the rate of interest for different tenures. Many banks also have a recurring deposit interest calculator where you can check the final maturity amount and the interest on the deposit.
To open RD account, you need to log in to net banking. Depending on the bank, the net banking structure will be different. You need to select the option to open a new recurring deposit account. Once you select that, you need to decide the installment amount and the tenure. You will also need to select the account to link to your RD account i.e. current account or savings account .
One important thing to remember is to specifically choose ‘Senior citizen’ option if you are eligible. Most banks give a higher rate of interest to senior citizens.
The next important point to remember is the maturity instructions. Depending on whether you immediately need the funds or not, you can opt for a maturity of the entire principal and interest amount, or convert the entire amount to fixed deposit . You also have the option of converting the principal amount only into an FD. If you decide to convert it into an FD, then you need to decide the tenure for the FD as well.
The last detail you need to take care of is the nomination details. It is recommended to set up a nomination for your investment especially if you have an account under a single name.
Once these details are entered, you need to submit it and the bank debits your account. Once the account is debited, the RD gets created.
How to Open RD Account Offline:
Opening an RD account offline is also very simple. All you need to do is go to the bank branch and fill up a form for opening a recurring deposit account. You need to fill up the reqred details and submit it to the bank along with a cheque for the installment amount. If you are a customer of the bank then you need to put in your bank account details along with other details such as maturity instructions and nomination details.
If you are opening an RD account in a bank in which you do not have an account, then you will have to provide your KYC documents along with the account opening form and other details. You will need to decide the RD tenure, the installment amount, the nomination details and the maturity amount. You will need to either give standing instructions to your bank for a periodic debit to the bank account or personally deposit money in your RD account to ensure the installments are met. If you want to get an exemption from TDS on your interest, be sure to submit Form 15G/15H.
Once the RD is processed and opened, the bank will provide an RD certificate bearing all the details.
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How to Calculate Recurring Deposit Interest Rate?
A recurring deposit is one of the best ways a small investor can invest funds and grow them. In a recurring deposit, a fixed amount of money is invested at a fixed duration for a fixed period of time. These installments all mature on the same date. Essentially, a recurring deposit is like having multiple fixed deposit investments, all of which mature on the same day.
Features and Benefits of Investing in Recurring Deposit
The best way to grow your corpus and begin investing is to put money into an investment regularly. Investments that call for regular installments not only help to build up savings, but they also enforce discipline among the investors. One of the most popular investments that meets the description above is a recurring deposit or RD. Read this handy guide to know what are the features and advantages of RD account.
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