A Complete Guide on Recurring Deposit (RD)

Not every investor has the risk appetite to invest in high-risk instruments. Even those who do, often look for low-risk investments to build a diversified portfolio. One investment option that is popular among risk-averse and risk-seeking investors is RD.

But what is RD Account? What are the features of RD? Let’s take a detailed look at 7 things related to RDs to help you make an informed decision.

RD full form is Recurring Deposit. It is a type of Term Deposit Account that allows the investors to make regular investments for a pre-defined period to generate pre-fixed returns. So, whether you're aiming for long-term wealth creation or want to invest for life goals like your child's higher education, an RD can be a perfect low-risk investment option.

Here are some of the top features of Recurring Deposits (RDs)-

• Highly competitive RD interest rates p.a, depending on your investment amount & tenure
• As RD requires regular investments, it builds a habit of saving
• You can start investing with as little as INR 100
• Flexible tenures ranging from 3 months to 10 years

Recurring Deposit interest rates depend on the bank you choose for your RD Account. For instance, AU Small Finance Bank offers highly competitive RD interest rates depending on the tenure and principal amount. Moreover, the leading Small Finance Bank offers up to 0.50% extra interest to senior RD Account holders.

Another top reason to invest in a Recurring Deposit Account is its minimal eligibility criteria. Whether you’re a Resident Indian or an NRI (Non-Resident Indian), you can open an RD Account.

Still looking for reasons to invest in RD? Here are some of the benefits you should know about-

• Easy to Understand

RDs are one of the easiest-to-understand investments. You choose an amount and investment frequency and continue investing for the selected tenure. On maturity, you receive the principal amount along with the interest income.

• Guaranteed Returns

Like FDs, RDs are not market-linked. Apart from making RDs a low-risk investment, it also ensures the returns you'll generate from the investment are fixed. On maturity, you'll receive returns based on the interest rate fixed when opening the RD Account. 

• Anytime Withdrawal

While you should consider remaining invested for the entire chosen tenure, it is possible to withdraw your Recurring Deposit investment at any time prematurely. While there may be a small penalty for early withdrawals, flexibility can come in handy in a financial emergency.

Now that you know the Recurring Deposit meaning and its benefits, let’s check out how to open an RD Account.

AU Small Finance Bank allows customers to book an RD Account online and offline. If you already have a Savings Account with the bank, you can use AU 0101 App/NetBanking or AU Video Banking to open an RD Account. You can visit the nearest branch to book an RD if you prefer the offline method.

In case you don't have a Savings Account with AU Small Finance Bank, you can use the same channels to open the account and then to book an RD.

Some of the factors you should consider before opening an RD Account are as follows-

• RD Interest Rate

Ensure the bank you select offers highly competitive interest rates on RD Accounts.

• Low Minimum Investment

You can begin your investment in RD by contributing as little as INR 100.

• Flexible Tenure

The bank should offer flexible minimum and maximum RD tenure to help customers choose a tenure as per their requirements.

• Online and Offline Account Opening

The bank should allow customers to book an RD online and offline conveniently.

Read More: The Difference Between Fixed & Recurring Deposits

• Understanding what is Recurring Deposit, how it works, and its features and benefits is essential to make an informed decision.
• Now that you know some of the most important things about RDs, choose a trusted bank to open your RD Account at the earliest.
• With highly competitive interest rates, flexible investment tenure, low minimum investment, and easy online and offline account opening, AU Small Finance Bank is one of the top choices to book an RD.
• Click here to learn more about our Recurring Deposits and apply for an account today.

*Terms and Conditions apply. Rates are subject to change at the sole discretion of AU Small Finance Bank.