SBI Recurring Deposit Account Scheme - Benefits

SBI Recurring Deposit Scheme is the best for month wise saving.

In a recurring deposit (RD) you have to make regular monthly deposits and on this deposit you will get an interest rate which is higher than your regular saving schemes.

To open a recurring deposit account with SBI you need to deposit a minimum amount of Rs. 100 per month. The tenure of a recurring deposit account ranges from 1 year to 10 years.

In the following we have completely explained the benefits and rate of Interest in SBI recurring deposit scheme: 

 

What are the features and benefits of SBI recurring deposit scheme?

• Minimum deposit amount is Rs. 100 per month
• Tenure of account range from 1 year to 10 years
• Extra 0.50% rate of interest is provided to senior citizens
• Recurring deposit (RD) accounts can be opened online and offline mode.
• You can get 90% loan on your recurring deposit balance.
• You can also transfer RD account from one branch to another.
• In RD account Nomination facility is also available.
• There is no maximum limit in recurring deposit account.

 

What is the SBI recurring deposit Interest Rates?

The rate of interest in SBI recurring deposit depends upon its deposit.

Here is the table showing the rate of interest for deposits upto 2 crores.

Tenure	Recurring Deposit Interest Rate (Normal Rate)	Recurring Deposit Interest Rate (Senior Citizens)
1 year to 1 year 364 days	5.00%	5.50%
2 years to 2 years 364 days	5.10%	5.60%
3 years to 4 years 364 days	5.30%	5.80%
5 years to 10 years	5.40%	6.20%

If the deposit is less than Rs.2 crore then interests are 5.00% and 5.40% for normal RD account.

For senior citizens extra interest is given of 0.50% on normal interest rates.

Also Read: Saving Account (Types, Benefits, & Document Required)

 

What are the rules regarding premature withdrawal of SBI recurring deposit schemes?

You can withdraw an amount prematurely from an SBI recurring deposit account. But a nominal penalty will be charged. SBI does not allow partial withdrawals.

 

What are the eligibility criteria to open a recurring deposit with SBI?

• You must be an Indian resident or member of Hindu Undivided Family (HUF).
• If you are non-resident Indian then you can apply for non-resident external or non-resident ordinary account.
• Minor can also open recurring deposit (RD) accounts in SBI. Minor accounts need to be maintained by his/her Parents or legal guardians.

 

What are the documents required to open a recurring deposit with SBI?

Below are the list of documents which you are required to submit any of the following to prove your identity and address.

Proof of Identity	Proof of address
PAN Card Government ID card Ration Card \ Voter ID Card or Aadhaar card. Senior citizen card.	Aadhaar card Voter ID Card Passport Telephone or Electricity bill Bank account statement

Also Read: SBI International debit card (visa paywave / mastercard paypass)

How to open a SBI recurring deposit account?

SBI recurring deposit account can be opened in two ways.

Offline Mode

In offline mode you have to visit the nearest branch of SBI and fill the RD account opening form and submit the required documents.

Online Mode

If you have a savings account with SBI then you can apply through netbanking.

 

Is recurring deposit (RD) exempted from tax?

In a recurring deposit account TDS @10% on interest is deducted if interest on deposit exceeds Rs.40,000 per financial year, and for senior citizen interest on deposit exceeds Rs. 50,000 per financial year.

If you are not providing PAN Number to the Bank then TDS will be deducted @20% on Interest on deposit.

 

What are the types of SBI RD accounts?

Normal Recurring deposit

It is the most preferable recurring deposit (RD) offered by a bank. You can open it with a minimum monthly deposit of Rs.100 or higher amount. The tenure ranges from 1 year to 10 years.

 

SBI Flexi Recurring deposit

In SBI Flexi Recurring deposit account you can deposit amount as per your saving every month instead of paying the fixed amount.

But you have to maintain a minimum of Rs. 5000 deposit per year and it should not exceed Rs.50000 per year. The tenure for this deposit scheme is 5 years to 7 years.

Also Read: SBI IOCL Contactless Debit Cards (Global and Platinum) – Review

 

How much penalty will be charged in SBI recurring deposit account for late payment?

Penalty is charged in SBI recurring deposit account on late payment which is as under:

Tenure	Penalty
5 years or Less	Rs.1.50 per Rs.100 per month
More than 5 years	Rs.2 per Rs.100 per month

 

Conclusion

SBI recurring deposit scheme is best for saving small amount monthly. A rate of Interest in SBI recurring deposit accounts is better than Normal Saving Account. On Maturity of this account you can convert it into a fixed deposit account to earn higher interest.