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Introduction to Banking

Recurring Deposit

As Sathish learned more about Fixed deposits, he came to know that there are two ways to invest money in fixed deposits- as a lump sum or a fixed amount monthly. Recurring deposits are fixed deposits where customers can invest a fixed sum of money every month. The money can be debited from a savings/current bank account on a fixed date every month. Recurring deposits offer customers a chance to build up a savings corpus. It also brings a habit of investment in people. In most cases, recurring deposits can be made for a period of 6 months to 10 years. 

 

When a recurring deposit is opened, the maturity value is indicated assuming the customer invests the fixed sum for the fixed deposit term agreed upon. Some banks provide loans on recurring deposits.

 

Fixed Deposits vs Recurring Deposits

Below is a comparison of the features of Fixed Deposits and Recurring Deposits:

 

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Units 8/42