What are the Various Installment Frequencies and Payment Methods available for Recurring deposits(RD)?

  • Recurring Deposit
  • 1 Months ago
Recurring Deposits

  • What is a recurring deposit scheme?
  • Who can invest in a recurring deposit?
  • Can you opt for a recurring deposit online payment mode?

A recurring deposit (RD) is a way to develop the habit of savings in the depositors. Getting used to RD installment frequency is one of the best ways for people with regular cash inflow to save money and earn interest. It is one of the oldest forms of investments available and offered by most financial institutions in India. 

This article discusses the reasons behind its popularity and how you can automate it to further make it seamless for yourself. 

What is a recurring deposit scheme?

A recurring deposit is a monthly installment plan that gives the depositors the flexibility to choose the amount of investment and the tenure. It is more lucrative as an investment as it offers higher interest than a savings account while having the same features. Shriram City provides one of the highest returns on the monthly RD saving scheme

Who can invest in a recurring deposit?

A recurring deposit scheme with Shriram City Union Finance can be availed of by the following –

  • Any Indian national
  • Any HUF (Hindu Undivided Family)
  • Any minor-aged ten years or below under the guidance of the legal guardian
  • Any minor above ten years of age by submitting requisite documents
  • Any government organization 

Documentation necessary for starting an RD account

Here are the documents an individual looking to open a monthly RD saving scheme with Shriram City has to furnish – 

For individuals

  • Any of the following ID proofs –
    • Passport
    • PAN card
    • Driving license
    • Voter ID
    • Aadhaar
    • Job card by NREGA
  • Any of the following address proofs –
    • Passport
    • Driving license
    • Voter ID
    • Aadhaar card
    • Job card by NREGA

Click here to check the entire acceptable address proof list.   

  • A self-attested photograph

 For HUFs

  • HUF PAN card
  • HUF Declaration
  • Address and identity proofs of the Karta (as mentioned above) 

Benefits of recurring deposits

Investing in an RD installment scheme is a safe and secure option to grow your money. Here are the benefits that it offers to the depositors – 

A clutter-free offering

Recurring deposits are a clutter-free, simple financial offering that even a minor can understand. So it acts as an excellent option for those looking to start their investment journey. Given its risk-free nature, it also acts as a perfect option for someone looking to hedge their risk. 

Guaranteed fixed returns and safety of money

When you invest in an RD scheme, there is no downside risk attached to it. It means that it offers the safety of the investment. Also, when you enter an RD scheme, the offer document explicitly states the interest that you will get on the principal you deposit. 

Flexible tenure and deposit amount

Are you looking to buy something after a year but want to keep aside some money every month? Or do you want to buy an asset after five years but want to invest your money in a risk-free vehicle? You can use the monthly RD saving scheme in both cases. The duration of a recurring deposit ranges between 12 and 60 months. 

Also, you can start from as low as ₹ 500 every month and go all the way up to ₹ 1 lakh. It gives you the requisite bandwidth to plan for the asset you are looking to buy after a specific time frame. 

Withdrawal facility

Shriram City Recurring Deposit comes with a premature withdrawal facility. The depositor can withdraw after the first three months but is not entitled to interest if the term is below six months. If the tenure exceeds six months, but you want to withdraw before maturity, you will receive 2% lower interest than specified when you began investing. 

Loan option

Most financial companies offer loans against an RD up to 95% of the amount deposited. So in case you are in immediate need of money, you can always use it as a security for raising a loan. 

Online facility

With e-NACH and e-Mandate, depositors can now get the benefit of an online recurring deposit facility. In addition, you can check the status of your RD account, update your personal information, all without visiting our branch. 

Can you opt for a recurring deposit online payment mode?

Yes, you can choose your default Shriram City recurring deposit online payment mode. We also offer you the facility to open your RD online.

What is the frequency option available for Shriram City depositors?

As of now, we only offer recurring deposit monthly installment frequency scheme to the depositors. 

e-NACH and e-Mandate will make recurring payments easier

e-NACH stands for Electronic National Automated Clearing House. Thee-NACh is NPCI-governed, covering over 40 banks. The e-Mandate is individual banks managed and relatively less popular as of now. 

e-NACH and e-Mandate help users schedule their recurring payments at the beginning of the payment time frame. It will save you from the hassles of setting up reminders for paying manually or incurring late fees. 

The user can set up an e-Mandate by completing a net banking transaction via the bank that supports it. It will ensure that all the payments to the same source will no longer require the user to intervene in the process manually. 

How to activate e-NACH mode for recurring deposits?

Here are the steps to activate e-NACH as the default recurring deposit payment mode

  1. Download the NACH enrolment form (bank-specific)
  2. Fill the form (online or hard copy, depending on your bank)
  3. Choose the requisite payment options available with your bank
  4. Complete and submit the form (if online, make sure you send it via your registered email ID) 

Tax on recurring deposit

The principal part of the recurring deposit is tax-free, but the interest part is not. The TDS (tax deduction at source) depends on the tax slab you fall into, and you can claim it as an IT refund if you meet specific criteria. You can submit Form 15G to the Income Tax department to claim an IT refund of the amount deducted from your interest income as tax. 

Invest in a monthly RD savings scheme with Shriram City today

Investing in a recurring deposit is an excellent way to instill the habit of savings in you. It is also an integral part of a portfolio if you are looking for vehicles to hedge your risk. 

Given its importance, it is impeccable for you to find the right partner to open your monthly RD saving scheme with, such as Shriram City. We come with over 45 years of customer trust and have served over 5 million customers to date. 

Our Recurring Deposits scheme is MAA+ rated by ICRA and offers flexibility to the depositors. 

Explore our recurring deposit scheme and start investing for a better future.