A Recurring Deposit (RD) is a straightforward investment option that offers investors the opportunity to earn a high Return on Investment (ROI) by regularly depositing a predetermined amount of money over a specific duration. Holding an RD account ensures a steady stream of income in the form of savings, which is paid out along with the initial investment at maturity. Opening an RD account in a preferred bank can be done through various methods, including the convenient option of it online. This blog will provide an introduction to the process of opening a recurring deposit account, offering valuable insights and guidance for interested individuals.
How to Open a Recurring Deposit(RD) Account?
Hands-On Approach: Opening a Recurring Deposit Account at a Bank Branch
To initiate a Recurring Deposit (RD) with a bank, the process may vary depending on whether you already have an account with the bank or not.
If you already have an account with the bank:
Simply visit the bank and complete an application form to start an RD. Since you already hold an account, the bank would have your necessary details on record, making the application process smoother. By filling out the application form, you can indicate your intention to open an RD and provide any additional information required by the bank.
If you don’t have an account with the bank:
When visiting the bank to open an RD account, ensure you carry your Know Your Customer (KYC) documents. These documents typically include proof of identity, address, and sometimes photographs as per the bank’s requirements. The bank staff will guide you through the account opening process, including the necessary KYC verification.
Once your details are verified:
After submitting the RD application form and completing the KYC verification process, the bank will proceed to open an RD account for you. They will review the provided information and complete any necessary internal checks. Once the verification process is complete, the bank will initiate the setup of your RD account.
It’s important to note that specific procedures and requirements may vary among banks. Therefore, it is advisable to contact your bank directly or consult their website for precise instructions regarding opening an RD account.
The Digital Advantage: Open an RD Account Online
Opening a recurring deposit (RD) account online via net banking offers great convenience. Before initiating the process, it’s crucial to review the interest rates offered for different tenures. Many banks provide a recurring deposit interest calculator that allows you to determine the final maturity amount and interest generated on the deposit.
Calculate your returns in a Freo Savings RD and compare it with any other bank’s returns!
- To open an online RD account, you need to access your net banking portal. The specific steps may vary depending on the bank’s interface. Look for the option to open a new recurring deposit account and proceed accordingly. During the account setup, you’ll need to determine the installment amount and the desired tenure. Additionally, you’ll have to select the account (current or savings) to link with your RD account.
- If you are eligible, it is important to select the ‘Senior citizen’ option while opening the account, as most banks offer a higher rate of interest to senior citizens.
- Another crucial aspect to consider is the maturity instructions. Based on your immediate requirements, you can choose to receive the entire principal amount along with the interest at maturity, convert the entire amount into a fixed deposit (FD), or convert only the principal into an FD. If you opt for an FD, you’ll need to decide the tenure for the fixed deposit as well.
- Lastly, it is recommended to set up a nomination for your investment, especially if the account is in a single name. This ensures smooth transfer of the investment in case of any unforeseen circumstances.
Once all the required details are entered, you can submit the application, and the bank will debit the specified account. Once the account is debited, your RD account will be successfully created.
Open RD Online with Freo in 5 Easy Steps
When selecting a bank for opening a recurring deposit (RD) account, it is advisable to compare the facilities and user-friendliness offered by different banks. Each bank may provide distinct features and conditions for opening RD accounts, so it is important to carefully consider these factors. For example, Freo offers an RD with an attractive interest rate of up to 8.7%. They allow you to start with as low as Rs.1000 and choose a tenure ranging from 12 months to 10 years.
To open an RD account with Freo Savings, follow these simple steps:
- Download the Freo app.
- Open your Freo account.
- Locate the ‘Recurring Deposit’ option within the app.
- Choose the desired amount and tenure for your RD.
- Select the account and date for the standing instructions to debit the required amount.
Opening an RD account with Freo Savings is a hassle-free process that requires minimal documentation. If you are seeking a convenient and straightforward way to start an RD, Freo offers a user-friendly experience.