One of the main benefits of recurring deposit account is the attractive interest rate . For instance, IDFC FIRST Bank offers 6.75% to 7.25% for a recurring deposit. This is higher than savings account interest rates. Do remember that the interest rates are per annum. The payout will only be made at the maturity of the recurring deposit with quarterly compounding. Recurring deposits are currently available only for domestic and senior citizens in most banks.

Previously, when savers for some unavoidable reason missed a recurring deposit, they were forced to pay a monetary fine. But, those days are gone.  Customer-friendly financial institutions . Do, however, remember in case of premature withdrawal  before 30 days, no interest is payable. In case of premature withdrawal of a recurring deposit after 30 days and before 6 months, the interest rate you will get will be the fixed deposit card rate applicable for 30- 45 days.

There is no need to think that you have to save a lot of money every month to get a recurring deposit. One of the key advantages of a recurring deposit is that you can start with minimum Rs 2,000 per month. On the higher side, the maximum monthly installment for recurring deposits will be Rs 75,000.

In the case of many investment products, you have to commit to a fixed time period. This is usually 12-24 months. One of the benefits of recurring deposit account is that the commitment period is much lower.

The documents required for opening a recurring deposit account, are not difficult to arrange. All resident individuals can open a recurring deposit with a linked savings account. Once the savings account is opened, no further documentation is required. This is the simplest and most hassle-free way to save money and create wealth with a guarantee.