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What is recurring deposite?

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Anonymous

12y ago
Updated: 1/19/2023

Recurring Deposits in banks are one of the instruments of accumulating a particular amount periodically, to help us during various occasions of unexpected financial burden. It is a good saving instrument for ordinary middle class, which has a fixed amount of revenue as its monthly income. It is also suitable for small time businessmen, Traders etc, as they do not have to block a large sum, which is a requirement for other types of saving instruments. Even some smart students open recurring deposit accounts with the pocket money they get from the parents. Almost all banks offer Recurring Deposit Scheme, and all of them have their own set of features.

Benefits of recurring deposit scheme:

1. The Recurring Deposit scheme, like all other investment avenues, comes with its own set of benefits and they are:

2. Minimum amount of Deposit is Rs.10. No maximum limit. Deposit should be made every month within the calendar month. Default fee is chargeable for delayed deposit at 0.20 P. per month of delay, for Rs. 10 Denomination.

3. Maximum defaults allowed in an account is four (4). After four defaults the account is treated as 'discontinued'. Discontinued account can be revived by paying defaulted deposits, within two months from the fifth default. If it is not so revived, the account cannot be continued.

4. For advance deposits, including deposit for current month, rebate is allowed at the rate: Denomination Rs.10. 6 advance deposits…….Re.1/- 12 advance deposits: 4/-

5. Premature closure is permitted on completion of 3 years from the date of opening. Interest is to be calculated as per the rules and rate applicable to individual savings account. at the rate applicable to savings account from time to time is calculated and paid.

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Vella Little

Lvl 9
2y ago

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