Recurring Deposit is a special type of deposit account which enables a depositor particularly in fixed income group to save by paying into the account an agreed fixed sum of money monthly over a stipulated period. The deposits in this type of account earn compound interest on quarterly basis. Longer the period for which monthly deposits are agreed to be made higher is the rate of interest subject to rules.
KYC ( Know Your Customer) Norms for opening account are applicable for these accounts also hence proof of residence and proof of identification will be required along with recent photograph of the depositor/s
only individuals are eligible to open accounts under the scheme.
Thus, the Recurring Deposit Accounts can be opened in the names of
A Recurring Deposit account where the compounding of interest is to be done on quarterly basis shall be accepted for periods in multiples of three months only upto the maximum period of ten years..
As per amendments brought about in Finance Act 2015, TDS will be applicable for Recurring Deposits, also.