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Introduction
A long- term investment plan, Recurring Deposit (RD) is a systematic investment plan wherein you make regular instalments and earn interest at the end of the maturity period. It functions similarly to the Fixed Deposit scheme. Small amounts of deposit is made on a monthly basis for a specific period to help in saving money. A major difference between recurring deposit and Fixed Deposit (FD) is the size of investment to be made. In fixed deposit, one needs to deposit a huge amount in a single-go for a specific period instead of smaller instalments. Interest rates are however similar in both types of investments.
About Indian Overseas Bank Recurring Deposit Rate
- Indian Overseas Bank Recurring Deposit
- Benefits of Indian Overseas Bank Recurring Deposit Account
- Features of Indian Overseas Bank Recurring Deposit Account
- Indian Overseas Bank Recurring Deposit Interest Rates
- Indian Overseas Bank Recurring Deposit interest rates for NRE Term Deposits
- Who can open a Recurring Deposit account with Indian Overseas Bank?
- Advantages of Opening a Recurring Deposit account
- Disadvantages of Opening a Recurring Deposit account
- Indian Overseas Bank recurring deposit FAQs
Indian Overseas Bank Recurring Deposit
Indian Overseas Bank offers recurring deposit scheme that helps salaried or a rural saver to invest in small amounts and earn returns. One can make monthly deposits in this scheme and achieve financial goals like children’s education or marriage. The depositor can decide the period of investment and the number of instalments. Indian Overseas Bank also offers loan facility against the recurring deposit.
Benefits of Indian Overseas Bank Recurring Deposit Account
- It is an easy scheme to make small investment every month for future
- It is more suitable for people with regular income or are salaried
- There is no upper limit for the maximum amount that can be deposited for this recurring deposit scheme
- Indian Overseas Bank offers loan facility on its recurring deposit account
- The recurring deposit account can be closed prematurely without any difficulty
- It is a low risk investment and hence safe to invest
- The recurring deposit account is protected against market fluctuations
- Standing instruction can be given to the bank to make the monthly deposits so that you don’t miss the payments
Features of Indian Overseas Bank Recurring Deposit Account
- The minimum deposit amount is only Rs. 50/- and additional contribution can be made in multiples of Rs. 5/-
- The bank offers the same interest rate as Fixed Term Deposit
- Interest is compounded every quarter
- One can make variable deposits from 6 months to 120 months
- TDS is applicable on the interest paid/accrued on recurring deposit account
- Minimum deposit period is 6 months
Indian Overseas Bank Recurring Deposit Interest Rates
Indian Overseas Bank offers interest rate on recurring deposit same as that of Fixed Term Deposit. The bank can change these rates at their discretion and hence it is recommended that you check on the current rates before opening an account.
| Period of Deposit | New Rate (%) effective from 05-04-2018 |
|---|---|
| Up to less than Rs. 1 Crore | |
| 7-14 days* | 4.50 |
| 15-29 days | 4.50 |
| 30-45 Days | 4.50 |
| 46 -60 Days | 4.60 |
| 61-90 days | 4.60 |
| 91-120 days | 5.25 |
| 121-179 days | 5.50 |
| 180 -269 days | 5.75 |
| 270 days - < 1 year | 6.25 |
| 1 yr - < 2 yrs | 6.60 |
| 2 yrs to < 3yrs | 6.75 |
| 3 Yrs and above | 6.80 |
*Minimum amount Rs. 1 lac
For Senior citizens, the bank offers an additional rate of 0.50%
Indian Overseas Bank Recurring Deposit interest rates for NRE Term Deposits
| Period of Deposit | New Rate (%) effective from 05-04-2018 |
|---|---|
| Up to less than Rs. 1 Crore | |
| 1 Year to < 2 Years | 6.60 |
| 2 Years to < 3 Years | 6.75 |
| 3 Years and Above | 6.80 |
Who can open a Recurring Deposit account with Indian Overseas Bank?
The Indian Overseas Bank has categorized the people who could possible benefit from a recurring deposit Account:
- Salaried Individuals
- Small Traders
- Housewife
- Students
- Rural Savers
- Customers who have limited or stipulated income and require large sum of money but can save only small amounts every month
Advantages of Opening a Recurring Deposit account
Some of the advantages of having a recurring deposit account to put your savings are mentioned below:
- Higher interest rate over savings account and similar to fixed deposit schemes make recurring deposit account attractive
- Simple documentation to open a recurring deposit account
- It is considered as a good choice for salaried or limited income people who cannot invest huge sums of money at one shot.
- It helps in maintaining liquidity in your financial portfolio
- Recurring deposit account is not affected by market fluctuations
- Minimal investment amount to start the account
- A lump sum amount can be earned at the end of the maturity period
- One can choose own tenure for the deposit
- Returns are assured as the interest rate is fixed
- Most banks offer loan/overdraft facility on recurring deposit account
Disadvantages of Opening a Recurring Deposit account
| Description | Foreclosure Charges |
|---|---|
| Retail Term Deposits up to Rs. 15,000/- | Nil |
| Retail term deposits of Rs. 15,001/- up to Rs. 5 lakhs | 0.50% |
| Retail term deposits above Rs. 5 lacs but below Rs. 1 Crore | 1.00% |
| Bulk deposits of Rs. 1 crore & above | 1.00% |
Indian Overseas Bank recurring deposit FAQs
1. What is the difference between recurring deposit and fixed deposit account?
In a recurring deposit account, you can make small investments on a regular basis to earn a lump sum amount at the end of the maturity period. In Fixed Deposit account, you need make an investment of huge amount in one-go and earn returns at the end of the tenure.
2. What is the minimum amount to put into a recurring deposit account?
With Indian Overseas Bank, you can start a recurring deposit account with a low amount of Rs. 50/- and then in multiples of Rs. 5/- thereafter.
3. Is there a minimum period of investment?
Yes, you will need to invest for a minimum period of 6 months.
4. Can I get a loan on the recurring deposit account?
The Indian Overseas Bank offers 90% loan on the deposit amount in the recurring deposit account. The Interest rate is also applicable accordingly.
5. Does Indian Overseas Bank offer any special privileges to senior citizens?
Yes, senior citizens get an additional interest rate of 0.50% over the card rate with Indian Overseas Bank.
6. How is the interest calculated in a recurring deposit account?
Interest is compounded on a quarterly basis and paid at the end of the maturity period.
Indian Overseas Bank Recurring Deposit Rate - Customer Reviews
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