Recurring Deposit Scheme (RD)

This is a type of fixed deposit where individuals can deposit a fixed amount of money on a monthly basis for a predetermined tenure. This scheme is popular for people who wish to save consistently over time and earn interest on their deposits, but are unable to make a large lump- sum deposit at once. Here's a clearer explanation of the features:

Key Features of a Recurring Deposit Scheme:

Fixed Monthly Contributions: You contribute a fixed amount of money every month, for the duration of the RD term.
Fixed Tenure: The term is generally set for a period starting from 15 months and above.
Maturity: At the end of the term, you receive the sum of your monthly contributions along with the interest accrued on those deposits.
Interest Rate: The interest rate is generally higher than regular savings accounts but lower than that of a Fixed Deposit (FD).
Senior Citizens’ Benefit: In many banks, senior citizens are offered an additional interest rate of 0.50% per annum over the standard rate to encourage savings.