Recurring Deposits are one of the most popular investment options in India. Recurring Deposit is an essential and easy financial instrument that risk-averse investors seeking for a good investment program with decent returns pick. Continue reading to learn more about the benefits of investing in an Indian Recurring Deposit program.

A recurring deposit program requires the investor to deposit a fixed sum each month for a predetermined period, typically one to five years. When compared to fixed deposits, the recurring deposit scheme has one key difference: under a fixed deposit scheme, the investor must deposit a large sum once and leave it untouched for a length of time. Recurring Deposits are preferred by persons who do not have a lump sum of money or want to invest a fixed amount every month. The principal amount deposited, as well as the interest, is refunded after the term. For recurring deposits, interest is usually computed on a quarterly compounding basis.

Customers can choose from various Recurring Deposit plans offered by India's leading commercial and state banks. In addition, India Post provides the Post Office Recurring Deposit plan, which is a widely popular recurring deposit option. To start a recurring deposit account, a customer should follow the procedures outlined below:

1. If a customer already has an account with the bank, they can create a recurring deposit account by contacting the local bank branch or its customer service department.
2. They must call the local branch and submit an application form if a customer wants to start a recurring deposit account with a bank they do not already have an account with. They would also need to provide primary KYC papers to open an account.
3. The term and the monthly due amount (deposit amount) should be selected when setting up a recurring deposit account. Recurring Deposit payments can be made online using ECS, internet banking, or fund transfer.

1. A customer can open a recurring deposit account with a monthly investment of at least Rs.100.
2. The deposit period of Recurring Deposits is a minimum of six months and a maximum of 10 years.
3. Recurring deposit accounts pay a greater rate of interest than savings accounts.
4. Banks usually compound interest once per quarter.
5. No interest is given if a customer withdraws a recurring deposit within the lock-in period. The lock-in period for most banks is 30 days to 3 months.
6. A single account user can open any number of recurring deposit accounts.
7. Only a few banks and the Post Office accept advance deposits.
8. Partial withdrawal of funds is not permitted.
9. Premature withdrawals are permitted, although they come with a penalty.
10. Instead of a flat sum payment, as with fixed deposits, customers can easily make monthly instalments.
11. Customers can set up standing orders so that the payments are automatically withdrawn from their savings account without the need for personal intervention.
12. Senior folks may be eligible for a 0.5% interest rate increase.
13. Minors can have recurring deposit accounts created in their names, but only under the supervision of their parents or guardians.
14. You can get a loan or an overdraft on a recurring deposit balance. 

1. The habit of saving is instilled in every customer.
2. If customers skip the recurring deposit instalment for a month, they will not be penalised.
3. Customers can expect a more significant interest rate than they would get from a savings account.
4.  A recurring deposit account can be opened for as little as Rs.100.
5. The procedure of creating a recurring deposit account is simple, especially if a customer already has a savings account with the bank.
6. The process of documentation is simple. Existing members are usually exempt from submitting any paperwork.
7. It’s a great way to save money for a customer's short-term goals. 

1. There are no refunds if a customer withdraws within the lock-in period.
2. Partially or prematurely withdrawing incurs a penalty and must meet specific requirements.
3. The amount of each instalment is predetermined.
4. In comparison to other investment products, the interest rate is lower. 

A recurring deposit (recurring deposit) account is a type of investment that allows investors to make monthly deposits and save money over a set period. Investors may set the deposit's term and monthly payment amount depending on their needs. Recurring deposit plans are more flexible than fixed deposit plans, and they are often favoured by those who wish to open an account to save money and establish a rainy-day fund. Since we have discussed all the benefits and disadvantages of recurring deposits, an investor can now make an informed decision.