RD (Recurring Deposit) Accounts / SIP Accounts

Recurring Deposit / SIP accounts provide the facility of saving small amounts of money every month to meet future financial goals. The scheme is also called by the name Systematic Investment Plan (SIP). The investment in Recurring Deposit / SIP accounts earn interest at the rates applicable to Time / Fixed deposits for the corresponding period of investment.

These accounts are ideal for investors, who want to plan to save / invest a fixed amount of their income at every month and earn relatively higher interest on their investments for future liabilities like education and marriage of children, purchase /construction of house etc.

Salient features of Bank Recurring Deposit / SIP Accounts


Adult individuals, singly or jointly with other adults


The requirements for opening of accounts are the same as mentioned under Savings Bank Accounts.

Usually Recurring Deposit Accounts are maintained by banks for Saving Bank / Current Account holders only.

Minimum amount

Rs. 100/- per month.

The minimum amount varies from bank to bank.

Maximum amount

No Maximum limit

Maturity Period

12 months to 10 years.

Interest Rate

The Interest Rate varies from bank to bank.

The Interest Rate is as applicable to Term / Fixed deposit accounts in the concerned bank.

Usually deposits for longer periods attract higher interest rates.

The interest is usually compounded at quarterly rests.

Nomination facility



Transferable from one branch of the bank to another.

Tax benefits

Not Available

Interest Taxability

Interest earned is taxable.

Overdraft / Loan facility

Overdraft/loan facility is available against security of the balance in the account.

Premature payment

Premature payment is allowed subject to penalty of lower interest.

Other features

  • A pass book is issued in Recurring Deposit Accounts.
  • Delayed payment of monthly installments invite penalties.
  • Monthly instalment can be deposited by way of standing instruction from Saving Bank or Current Account.

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