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Introduction
Specific amounts of money may be transferred into an account - called the Recurring Deposit (RD) account every month to earn a good rate of return. Recurring deposit accounts allow individuals to periodically deposit their monthly savings into an account that can earn them up to 6% interest per annum and offer them a tidy lump sum amount at the maturity.
Recurring deposits are similar to fixed deposits that they give a fixed rate of interest for a fixed tenure. The difference between the two accounts is that while in a fixed deposit you have to deposit a lump sum right at the start with no interim deposits; in a recurring deposit you can deposit the amount over a period from 7 days to several months or even years.
About South Indian Bank Recurring Deposit Rate
- South Indian Bank Recurring Deposit Account
- Features of South Indian Bank recurring deposit Account
- Benefits of South Indian Bank Recurring Deposit Account
- South Indian Bank Recurring Deposit Interest Rates
- South Indian Bank's Recurring Deposit Calculator
- Advantages of opening a Recurring Deposit Account
- Disadvantages of opening a Recurring Deposit Account
- South Indian Bank recurring deposit FAQs
South Indian Bank Recurring Deposit Account
Recurring deposits inculcate a habit of saving which gives you a stable source of funds when you need them the most. Though fixed deposits offer much the same, you may not have a large amount of money to invest in fixed deposits whereas you can invest an amount as low as INR 500 in recurring deposits.
Features of South Indian Bank recurring deposit Account
The following are the features of the South Indian Bank recurring deposit account -
- The minimum amount of deposit required is 500.
- Tax will be deducted on interest.
- TDS certificate in form 16A will be supplied.
- Interest rates are allocated for specific periods. If the client wishes to withdraw his savings prior to expiry of the term, interest will be deducted as applicable.
- Penalties may be applied for premature withdrawal.
- An overdraft of up to 90% of amount in deposit is available subject to certain conditions.
- Easy transfer of deposit amount via net banking, ECS, or direct debit from SB account.
Benefits of South Indian Bank Recurring Deposit Account
The South Indian Bank Recurring Deposit account offers you the following benefits -
- It is an easy way to deposit your monthly savings.
- You can earn a reasonable interest on your savings.
- It is perfect for anyone who wants to set aside a part of their income for future.
- You can have tenure of your choice depending on when you will need the money.
- Interest rates are comparable to fixed deposits.
- It is a safe investment as there is no market risks involved.
- Interest rate remains constant throughout the tenure.
- Nomination facility is available.
- You can transfer the maturity amount directly into a fixed deposit so that it continues to earn interest.
South Indian Bank Recurring Deposit Interest Rates
The following are the interest rates applicable on South Indian Bank Recurring Deposit Account. Please bear in mind that interest rates are subject to change by the bank authorities at any time. As such it would be advisable to visit the bank branch or website for the current rates.
The rates given below are applicable from October 5th, 2018.
| Tenure | Interest % pa |
|---|---|
| 7 days to 45 days | 4 |
| 46 days to less than 1 year | 6 |
| 1 year to 2 years | 6.75 |
| Above 2 years to up to and incl.10 years | 6.5 |
South Indian Bank's Recurring Deposit Calculator
The South Indian Bank website has a recurring deposit calculator that helps you to estimate the amount you will receive if you deposit a certain sum of money for a certain period at applicable interest rates. This will give you an idea of how much cash you will have at a certain time in future and you can plan your finances accordingly.
Advantages of opening a Recurring Deposit Account
There are many advantages to opening a recurring deposit account. Some of these include -
- Recurring deposit accounts offer higher interest than SB accounts
- You can get a loan or overdraft of up to 90% of the amount in deposit
- Interest remains fixed through the tenure which means higher income
- You can open a recurring deposit account by depositing an amount as low as INR 500
- You can make frequent small deposits into the account as and when you have some cash to spare
Disadvantages of opening a Recurring Deposit Account
- Interest income attracts tax which will be deducted at source
- Premature withdrawals attract penalty
- Interest rates are lower than other types of investment - however these may involve higher risks
South Indian Bank recurring deposit FAQs
1. What is the minimum amount required to open a recurring deposit with South Indian Bank?
The minimum amount required to open a recurring deposit account is INR 500.
2. What is the minimum and maximum deposit period?
The minimum term for a recurring deposit with South Indian Bank is 6 months. The maximum is 10 years.
3. How do I apply for a regular recurring deposit?
You can open a recurring deposit account either through net banking, or by downloading the application form from the website and submitting it along with all necessary documents to the bank branch. The application form is also available at all branch offices of the bank.
4. What is the documentation required to open a recurring deposit account?
The following documents will be required for opening a recurring deposit account -
- Application form
- Passport size photograph
- Residence proof
- Identity Proof
- Age proof - for minors
Some other documents may be requested by the branch depending on individual cases.
5. Does the recurring deposit have a lock-in period?
Yes, the recurring deposit accounts have a minimum lock-in period of one month.
6. I want to close the recurring deposit account, but it has only been one month. What are the charges?
You cannot withdraw your recurring deposit for a period of 1 month after opening the account. At the end of the first month if you wish to close the account, your deposits will be refunded and no interest will be paid.
7. Can I avail an Overdraft facility?
South Indian Bank offers an overdraft of up to 90% of the amount in deposited in a recurring deposit account.
South Indian Bank Recurring Deposit Rate - Customer Reviews
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