{"id":109372,"date":"2025-06-25T07:04:40","date_gmt":"2025-06-25T07:04:40","guid":{"rendered":"https:\/\/drprem.com\/guide\/?p=109372"},"modified":"2025-06-25T07:26:49","modified_gmt":"2025-06-25T07:26:49","slug":"recurring-deposit-the-ideal-short-term-investment-plan","status":"publish","type":"post","link":"https:\/\/drprem.com\/guide\/recurring-deposit-the-ideal-short-term-investment-plan\/","title":{"rendered":"Recurring Deposit \u2013 The Ideal Short-Term Investment Plan"},"content":{"rendered":"<div class=\"38520354a5201685ddf480eec688e1a7\" data-index=\"1\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block; text-align:center;\"\r\n     data-ad-layout=\"in-article\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-client=\"ca-pub-9477973674766713\"\r\n     data-ad-slot=\"8885944693\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p data-start=\"238\" data-end=\"741\">Among different short-term investment plans available, a recurring deposit is a low-risk investment option that offers assured returns. It offers flexibility in choosing the amount and the tenure of investment, allowing you to create a short or long-term corpus. The minimum deposit amount to start with is as low as INR 100 per month, which will suit anyone&#8217;s budget. Under this investment option, a predetermined amount is deposited into an account each month for a specified period, earning interest.<\/p>\n<p data-start=\"743\" data-end=\"1197\">The interest amount on a recurring deposit can be calculated by considering several factors, including the deposit tenure, the funds invested, and the type of scheme chosen. The interest amount can be calculated using an <a href=\"https:\/\/www.hdfclife.com\/investment-plans\/investment-calculator\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #0000ff\">investment calculator<\/span><\/a>, i.e., a Recurring Deposit Calculator, or the following formula. As the calculation is quite complex, it becomes difficult for an investor to make accurate calculations, where an RD calculator comes as a savior.<\/p>\n<p data-start=\"1199\" data-end=\"1238\"><strong data-start=\"1199\" data-end=\"1238\">M = R[(1+i)^n \u2013 1]\/(1-(1+i)^(-1\/3))<\/strong><\/p>\n<p data-start=\"1240\" data-end=\"1332\">Where:<br data-start=\"1246\" data-end=\"1249\" \/>M = Maturity Value<br data-start=\"1267\" data-end=\"1270\" \/>R = Monthly EMI<br data-start=\"1285\" data-end=\"1288\" \/>n = Number of Quarters<br data-start=\"1310\" data-end=\"1313\" \/>i = Interest Rate<\/p>\n<p data-start=\"1334\" data-end=\"1373\">Let us understand this with an example:<\/p>\n<p data-start=\"1375\" data-end=\"1556\">Mr. X deposited INR 5000 in a recurring deposit account opened with a bank at an interest rate of 7.5% per annum. The amount to be received on maturity can be calculated as follows:<\/p>\n<p data-start=\"1558\" data-end=\"1663\"><strong data-start=\"1558\" data-end=\"1597\">M = R[(1+i)^n \u2013 1]\/(1-(1+i)^(-1\/3))<\/strong><br data-start=\"1597\" data-end=\"1600\" \/>= 5000 [(1+0.075)^4-1]\/(1-(1+0.075)^(-1\/3))<br data-start=\"1643\" data-end=\"1646\" \/>= INR 62,478.46<\/p>\n<h3 data-start=\"1670\" data-end=\"1704\">Features of Recurring Deposits<\/h3>\n<p data-start=\"1706\" data-end=\"1838\"><strong data-start=\"1706\" data-end=\"1733\">Minimum Deposit Amount:<\/strong><br data-start=\"1733\" data-end=\"1736\" \/>The minimum deposit amount for a recurring deposit varies from one bank to another, as low as INR 100.<\/p>\n<p data-start=\"1840\" data-end=\"1963\"><strong data-start=\"1840\" data-end=\"1859\">Tenure Options:<\/strong><br data-start=\"1859\" data-end=\"1862\" \/>The available tenure options for a recurring deposit are flexible, ranging from 6 months to 10 years.<\/p>\n<p data-start=\"1965\" data-end=\"2175\"><strong data-start=\"1965\" data-end=\"2004\">Standing Instructions for Deposits:<\/strong><br data-start=\"2004\" data-end=\"2007\" \/>It allows you to provide standing instructions for recurring deposits, enabling automatic transfers of funds from your savings account to the recurring deposit account.<\/p>\n<p data-start=\"2177\" data-end=\"2370\"><strong data-start=\"2177\" data-end=\"2205\">Withdrawal Restrictions:<\/strong><br data-start=\"2205\" data-end=\"2208\" \/>Some banks impose withdrawal restrictions, while others do not. This means some may allow premature withdrawal of funds, while others may allow it with a penalty.<\/p>\n<p data-start=\"2372\" data-end=\"2493\"><strong data-start=\"2372\" data-end=\"2403\">Competitive Interest Rates:<\/strong><br data-start=\"2403\" data-end=\"2406\" \/>They offer competitive interest rates, providing returns that exceed a savings account.<\/p>\n<p data-start=\"2495\" data-end=\"2660\"><strong data-start=\"2495\" data-end=\"2513\">Loan Facility:<\/strong><br data-start=\"2513\" data-end=\"2516\" \/>It also allows investors to avail a loan against the deposit amount, up to 80-90% of the deposit value, which varies from one lender to another.<\/p>\n<h3 data-start=\"2667\" data-end=\"2698\">Types of Recurring Deposits<\/h3>\n<ol data-start=\"2700\" data-end=\"4063\">\n<li data-start=\"2700\" data-end=\"3119\">\n<p data-start=\"2703\" data-end=\"3119\"><strong data-start=\"2703\" data-end=\"2727\">Regular RD Accounts:<\/strong><br data-start=\"2727\" data-end=\"2730\" \/>If you are looking for the <a href=\"https:\/\/www.hdfclife.com\/investment-plans\/best-investment-plan-for-1-year\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #0000ff\">best investment plan for 1 year<\/span><\/a> with the purpose of wealth creation, minimal risk, and disciplined savings, a regular RD is a perfect solution. They offer a fixed rate of interest with pre-determined returns, disciplined savings, and automatic investments. This type of account best suits salaried individuals, who prefer to invest a fixed amount every month.<\/p>\n<\/li>\n<li data-start=\"3121\" data-end=\"3445\">\n<p data-start=\"3124\" data-end=\"3445\"><strong data-start=\"3124\" data-end=\"3159\">RD Account for Senior Citizens:<\/strong><br data-start=\"3159\" data-end=\"3162\" \/>This account is well-suited for senior citizens, who have lower earning capacity after retirement, and offers them higher interest rate benefits. They are provided an additional benefit of 0.50% to 0.75% of interest rate, allowing them to earn higher returns on their investments.<\/p><div class=\"38520354a5201685ddf480eec688e1a7\" data-index=\"2\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block; text-align:center;\"\r\n     data-ad-layout=\"in-article\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-client=\"ca-pub-9477973674766713\"\r\n     data-ad-slot=\"8885944693\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n\n<\/li>\n<li data-start=\"3447\" data-end=\"3759\">\n<p data-start=\"3450\" data-end=\"3759\"><strong data-start=\"3450\" data-end=\"3476\">RD Account for Minors:<\/strong><br data-start=\"3476\" data-end=\"3479\" \/>To encourage the savings habit in young people, this RD account has been introduced, which allows minors to invest under the supervision of their parents or guardians. An RD account opened by parents or guardians for minors gets transferred to them once they achieve adulthood.<\/p>\n<\/li>\n<li data-start=\"3761\" data-end=\"4063\">\n<p data-start=\"3764\" data-end=\"4063\"><strong data-start=\"3764\" data-end=\"3806\">Non-Resident External Deposit Account:<\/strong><br data-start=\"3806\" data-end=\"3809\" \/>This account can be opened by Non-Resident Indians (NRIs) who wish to invest and save in India. In other words, while residing abroad, they can invest here, in India. The interest rate offered is exempt from tax, providing a competitive interest rate.<\/p>\n<\/li>\n<\/ol>\n<h3 data-start=\"4070\" data-end=\"4092\">Documents Required<\/h3>\n<p data-start=\"4094\" data-end=\"4177\">Provided below is the list of documents required while opening a recurring deposit:<\/p>\n<ul data-start=\"4179\" data-end=\"4359\">\n<li data-start=\"4179\" data-end=\"4203\">\n<p data-start=\"4181\" data-end=\"4203\">Account Opening Form<\/p>\n<\/li>\n<li data-start=\"4204\" data-end=\"4289\">\n<p data-start=\"4206\" data-end=\"4289\">Address Proof \u2013 Utility Bills, Driving License, Aadhaar Card, PAN, Voter ID, etc.<\/p>\n<\/li>\n<li data-start=\"4290\" data-end=\"4359\">\n<p data-start=\"4292\" data-end=\"4359\">Identity Proof \u2013 Voter ID, Aadhaar Card, PAN Card, Driving License.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"4366\" data-end=\"4390\">Eligibility Criteria<\/h3>\n<p data-start=\"4392\" data-end=\"4478\">Provided are the eligibility parameters to be met to open a recurring deposit account:<\/p>\n<ul data-start=\"4480\" data-end=\"4785\">\n<li data-start=\"4480\" data-end=\"4536\">\n<p data-start=\"4482\" data-end=\"4536\">Any individual can open a recurring deposit account.<\/p>\n<\/li>\n<li data-start=\"4537\" data-end=\"4689\">\n<p data-start=\"4539\" data-end=\"4689\">Minors who are 10 years of age or younger can get a recurring deposit account opened, but under the guardianship of their legal or natural guardian.<\/p>\n<\/li>\n<li data-start=\"4690\" data-end=\"4720\">\n<p data-start=\"4692\" data-end=\"4720\">A government organization.<\/p>\n<\/li>\n<li data-start=\"4721\" data-end=\"4785\">\n<p data-start=\"4723\" data-end=\"4785\">Proprietorship, corporate company, or commercial organization.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"4792\" data-end=\"4835\">Benefits of a Recurring Deposit Account<\/h3>\n<ol data-start=\"4837\" data-end=\"6126\">\n<li data-start=\"4837\" data-end=\"5010\">\n<p data-start=\"4840\" data-end=\"5010\"><strong data-start=\"4840\" data-end=\"4870\">Simple Investment Product:<\/strong><br data-start=\"4870\" data-end=\"4873\" \/>This financial product is one of the easiest and simplest to understand, making it a great starting point for your investment journey.<\/p>\n<\/li>\n<li data-start=\"5012\" data-end=\"5152\">\n<p data-start=\"5015\" data-end=\"5152\"><strong data-start=\"5015\" data-end=\"5038\">Guaranteed Returns:<\/strong><br data-start=\"5038\" data-end=\"5041\" \/>Recurring deposits offer guaranteed and assured returns, making them different from equity and mutual funds.<\/p>\n<\/li>\n<li data-start=\"5154\" data-end=\"5351\">\n<p data-start=\"5157\" data-end=\"5351\"><strong data-start=\"5157\" data-end=\"5177\">Flexible Tenure:<\/strong><br data-start=\"5177\" data-end=\"5180\" \/>It offers flexibility in selecting the investment tenure, i.e., short, medium, or long term, ranging from 6 months to 10 years, depending upon the financial objectives.<\/p>\n<\/li>\n<li data-start=\"5353\" data-end=\"5510\">\n<p data-start=\"5356\" data-end=\"5510\"><strong data-start=\"5356\" data-end=\"5380\">Low Minimum Deposit:<\/strong><br data-start=\"5380\" data-end=\"5383\" \/>For public sector banks, the minimum deposit amount is INR 100, while for private banks, it is between INR 500 and INR 1000.<\/p>\n<\/li>\n<li data-start=\"5512\" data-end=\"5671\">\n<p data-start=\"5515\" data-end=\"5671\"><strong data-start=\"5515\" data-end=\"5537\">Premature Closure:<\/strong><br data-start=\"5537\" data-end=\"5540\" \/>This plan offers liquidity of funds in the event of emergencies, by providing an option for premature withdrawal to individuals.<\/p>\n<\/li>\n<li data-start=\"5673\" data-end=\"5813\">\n<p data-start=\"5676\" data-end=\"5813\"><strong data-start=\"5676\" data-end=\"5696\">Loan Against RD:<\/strong><br data-start=\"5696\" data-end=\"5699\" \/>It also provides you with an option to avail a loan of up to 90-95% of your balance against recurring deposits.<\/p>\n<\/li>\n<li data-start=\"5815\" data-end=\"5974\">\n<p data-start=\"5818\" data-end=\"5974\"><strong data-start=\"5818\" data-end=\"5842\">Flexible RD Options:<\/strong><br data-start=\"5842\" data-end=\"5845\" \/>It allows you to deposit sometimes a larger amount and sometimes miss installments, providing flexibility without any penalty.<\/p>\n<\/li>\n<li data-start=\"5976\" data-end=\"6126\">\n<p data-start=\"5979\" data-end=\"6126\"><strong data-start=\"5979\" data-end=\"6008\">Encourages Saving Habits:<\/strong><br data-start=\"6008\" data-end=\"6011\" \/>This investment option encourages individuals to save more, making it an effective financial tool for investing.<\/p>\n<\/li>\n<\/ol>\n<h3 data-start=\"6133\" data-end=\"6147\">Conclusion<\/h3>\n<p data-start=\"6149\" data-end=\"6486\">Recurring deposits are best suited for individuals who want to invest in small portions. They offer a competitive rate of interest and minimal documentation. They are of great help in attaining short-term and long-term financial objectives. Hence, they serve as a hassle-free and safe investment choice, stimulating financial discipline.<\/p>\n<div class=\"38520354a5201685ddf480eec688e1a7\" data-index=\"3\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n          <p><a id=\"link-15\" href=\"\" target=\"_blank\" rel=\"noopener noreferrer\">\r\n            <img decoding=\"async\" style=\"width:100%;height:auto;\" id=\"img-15\" src=\"\"><\/a><\/p>\r\n            <script>\r\n            var xmlhttp = new XMLHttpRequest();\r\n            xmlhttp.onreadystatechange = function() {\r\n              if (this.readyState == 4 && this.status == 200) {\r\n                var myObj = JSON.parse(this.responseText);\r\n                document.getElementById(\"link-\"+myObj.id).setAttribute('href',myObj.url);\r\n                document.getElementById(\"img-\"+myObj.id).setAttribute('src','https:\/\/fetch.drprem.com\/\/uploads\/'+myObj.image);\r\n              }\r\n            };\r\n            xmlhttp.open(\"GET\", \"https:\/\/fetch.drprem.com\/\/api\/Ads\/15\", true);\r\n            xmlhttp.send();\r\n            <\/script>\r\n        \r\n        <style>\r\n        *{box-sizing:border-box}.top-container{display: grid;grid-template-columns: auto auto auto;}.column{float:left;width:100%;padding: 0 7.5px 15px 7.5px;}.row{margin:0 -5px}.row:after{content:\"\";display:table;clear:both}@media screen and (max-width: 600px){.top-container{display: block;grid-template-columns: unset;}.column{width:100%;display:block;margin-bottom:20px}}.card{text-align:center;}.card_image img{width:100%}.card_body{padding:15px}.card_title{font-size: 14px;line-height: 19px;text-decoration: none;text-align:left;color: #333;}.card-heading{text-align: left;margin-bottom: 25px !important;}\r\n        <\/style>\r\n        <div class=\"row todays-top\">\r\n            <h3 class=\"card-heading\"> Recent Articles: <\/h3><div class=\"top-container\" id=\"todays-top\">\r\n        <\/div>\r\n        <\/div>\r\n        <script>\r\n            var xmlhttp = new XMLHttpRequest();\r\n            xmlhttp.onreadystatechange = function() {\r\n            if (this.readyState == 4 && this.status == 200) {\r\n            var myObj = JSON.parse(this.responseText); \r\n            myObj.forEach(function(item) {\r\n            document.getElementById('todays-top').innerHTML += '<div class=\"column\"><div class=\"card\"><div class=\"card_image\"><a href=\"'+item.url+'\"><img decoding=\"async\" src=\"'+item.image+'\"><\/a><\/div><div class=\"card_body\"><a href=\"'+item.url+'\"><h3 class=\"card_title\">'+item.title+'<\/h3><\/a><a href=\"'+item.url+'\">Read more<\/a><\/div><\/div><\/div>';\r\n            });\r\n            }\r\n            };\r\n            xmlhttp.open(\"GET\", \"https:\/\/fetch.drprem.com\/api\/Drprem_blogs\", true);\r\n            xmlhttp.send();\r\n            <\/script>\r\n        \r\n        \r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<style>\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t.videoWrapper{position:relative;padding-bottom:56.25%;height:0}.videoWrapper iframe{position:absolute;top:0;left:0;width:100%;height:100%}\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/style>\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"videoWrapper\" id=\"video_7\">\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<script>\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tvar xmlhttp = new XMLHttpRequest();\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t            xmlhttp.onreadystatechange = function() {\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t            if (this.readyState == 4 && this.status == 200) {\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t                var myObj = JSON.parse(this.responseText);\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t                document.getElementById(\"video_\"+myObj.id).innerHTML = myObj.embed_video_code;\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t            }\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t            };\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t            xmlhttp.open(\"GET\", \"https:\/\/fetch.drprem.com\/api\/Videos\/7\", true);\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t            xmlhttp.send();\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/script>\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\n<\/div>\n\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>Among different short-term investment plans available, a recurring deposit is a low-risk investment option that offers assured returns. It offers flexibility in choosing the amount and the tenure of investment, allowing you to create a short or long-term corpus. The [&hellip;]<\/p>\n","protected":false},"author":107,"featured_media":109373,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[4722],"tags":[],"class_list":["post-109372","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-life-improving"],"_links":{"self":[{"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/posts\/109372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/users\/107"}],"replies":[{"embeddable":true,"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/comments?post=109372"}],"version-history":[{"count":0,"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/posts\/109372\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/media\/109373"}],"wp:attachment":[{"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/media?parent=109372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/categories?post=109372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/drprem.com\/guide\/wp-json\/wp\/v2\/tags?post=109372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}