Recurring deposits (RDs) are a popular investment option for those looking for a low-risk investment tool with moderate and assured returns. The RDs are offered by multiple banks and NBFCs that help in channelising monthly savings for long- or short-term corpus formation. This investment product is available in various duration options ranging from 6 months to 10 years.

It offers investors a disciplined way to save money regularly by depositing a fixed amount each month over a predetermined period while also earning interest on the accumulated funds. After the maturity period, the investor receives the total amount (ie, the capital and the interest earned).

This is a risk-free investment with guaranteed returns that can be used to achieve both short- and long-term objectives. This investment tool encourages savings by requiring you to make fixed monthly investments. It is especially beneficial for salaried individuals who have several financial goals to achieve on a fixed salary.

How to open an RD account online

Step 1: Log in to your bank’s net banking account or application.

Step 2: On your dashboard, choose the ‘Open an e-RD account’ option.

Step 3: Specify the account number to which the instalment should be debited, as well as the duration and the amount of the instalment. Furthermore, check the applicable RD interest rate and designate a nominee.

Step 4:

After you’ve entered the maturity amount, click the checkbox to confirm that you accept all of the terms and conditions.

Step 5: A confirmation message will be displayed and the RD receipt will be sent to the registered email address.

Step 6: The stated amount will then be deducted from the selected account.

Additionally, you can also open an RD account offline by visiting your nearest bank branch where you hold a savings account.

Documents required for opening an RD account

To open an RD account, you will need:

An application form.

Passport-size photograph of the applicant.

ID and address proof.

KYC documents.