A recurring deposit (RD) is a savings scheme where a certain amount is invested every month for a specified term. RD is among the prominent savings options among investors where the maturity amount including the invested principal and interest earned is payable to the individual on completion of the tenure.
Recurring deposit is considered by investors looking to build a corpus that comes with low risk and guaranteed returns. RD falls handy since it aims to invest a certain amount per month and you don’t have a lump sum to invest for a short-term purpose.
One can open a recurring deposit account with any post office or a bank. A minimum amount of Rs 500 to 1000 is usually deposited but that too ranges from bank to bank. The tenure extends from 6 months to a period of 10 years. Certain banks may offer a minimum term of 12 months for online RD.
In order to open RD with the State Bank of India, you need to sign in to your online SBI account and select e-RD (RD) or e-SBI Flexi Deposit option under the Fixed Deposit menu. Now select e-RD on the new page and proceed further. You will now be redirected to the next page where your active SBI accounts will be displayed. Choose the account from which you wish to invest and enter the amount that you want to deposit monthly. If you are a senior citizen, select the checkbox.
To proceed further, select the tenure of the recurring deposit. The minimum tenure of the RD account is 1 year. You may view tenure-wise interest rates by selecting ‘view interest rate: domestic term deposit’. In order to get the principal amount and interest deposited in your bank account select ‘Payback Principal and Interest’ option. Alternatively, you can choose to turn the maturity amount into a fixed deposit by selecting ‘convert to STDR’. Accept all the terms and conditions and click on submit.
The name of the nominee specified in the savings bank account will appear on the page with all details that you have entered. Now, click on ‘yes’ if you wish to keep the same nominee else select ‘Do you want the nominee/s to be mapped to your term deposit account’ and confirm. All details including maturity amount, tenure, interest rate will be confirmed on the next page. Proceed by clicking on the ‘view/print’ option to take a print out of your recurring deposit.
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