Recurring Deposit Account

POSTED BY Manish ON October 18, 2010 6:33 pm COMMENTS (3)

HI Manish,


I want to know about RD account . Can you please tell how will help in saving money for long term ans short term.

Can I save tax on it . Will you recommend user to open RD Account.


Please guide.


3 replies on this article “Recurring Deposit Account”

  1. Elaya Kumar S says:

    In Recurring deposit you have to remit a fixed amount at monthly intervals for a predetermined period (from 6 months to 120 months). Interest is calculated on quarterly basis depending upon the period – on the applicable rate for fixed deposits. No TDS for Recurring Deposit accounts. You can also take a loan up to 75% out of the savings made by you with 1% over the interest given to you.

    A variant of the RD is Variable Recurring Deposit. In this the instalments are variable. Let us assume the first instalment is made for 2000/-. Subsequent instalments can be remitted for amounts in multiples of the first instament. (50 times the initial instalment – this varies with different banks). Variable RD is better in the sense, we can increase the instalments depending on our monthly surplus.

  2. rakesh says:

    Recurring Deposit is an account where in every month you deposit a fixed amount into it. In case of FD you invest lump-sum. The interest earned will be slightly less than FD but more than the normal savings account. Suppose you have 25k in your savings account and earning 4% p.a., you can start RD with 2k per month, you will earn more returns than savings account at the end of the year. I personally invest every month in RD.
    You cannot save tax on it. For those who do not have knowledge in shares/MF can invest in RD.


    1. Ajay says:

      I think RD does not attract any TDS on the interest like FD… Correct me if I am wrong, but I got the info from

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