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.
|Eligibility||Adult individuals, singly or jointly with other adults|
|Requirements||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||₹ 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.
|Transferability||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.|
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