Types of Recurring Deposit (RD)

Explore different types of RD.
Types of RD
4 mins
23 March 2024

Recurring Deposit (RD) is a popular low-risk investment option in India, offered by various financial institutions. It allows investors to make regular monthly installments and save money for the long term. RDs are flexible, with tenure options ranging from 6 months to 10 years, and they help in channelising monthly savings for long or short-term corpus creation.

To diversify your portfolio and potentially earn higher returns, you can consider investing in fixed deposit.

Types of Recurring Deposit Accounts

1. Regular recurring deposit account

Regular RD scheme is widely available in most Indian financial institution. Any individual above the age of 18 can open this account. To get started, you simply need to choose a recurring amount and a tenure. Interest can be calculated on a simple or compound basis. It is important to note that no additional funds can be deposited during the ongoing tenure. The deposit amount and maturity period may vary from different financial institutions.

2. RD account for minors

Some financial institutions allow individuals under 18 years of age to open an RD account under parental or guardian supervision. This provides parents with a financial avenue to invest in their children's education and other essential needs. The returns under this scheme are either comparable to regular RD accounts or potentially higher.

3. RD accounts for senior citizens

Designed specifically for seniors, these RD accounts offer exclusive benefits to individuals of 60 years or above. Most financial institution offer them a higher interest rate than regular rates. The interest gets compounded every quarter.

Bajaj Finance offers an additional interest rate of up to 0.25% p.a. on their FD for senior citizens.

4. NRE/NRI recurring deposit

The NRE recurring deposit scheme requires funds to be deposited from non-residential external (NRE) account. Most Indian banks offer a minimum tenure of 1 year, and the deposit amount and interest rates vary among banks. A major benefit of this scheme is that the interest earned by NRIs is not taxable in India. Some banks also permit variable monthly deposits in their recurring deposit accounts.

What is Flexi RD?

Flexi RDs, or flexible recurring deposit schemes, give depositors the freedom to invest different amounts as they wish. You can decide the fixed investment amount and you have an option to choose how much extra to add each time. It is like having the flexibility to adjust your savings based on your financial situation while still earning a steady interest rate.

While the interest on the core amount is fixed, the interest on multiples of the core is calculated based on the investment period.

Benefits of RD Account

  • RDs allow individuals to save money regularly, fostering a disciplined savings habit.
  • RDs generally provides higher interest rate than that of a savings account.
  • A recurring deposit account can be opened for as little as Rs. 100
  • No penalties charges if you miss an RD payment for a month.
  • RDs offer flexibility in choosing the deposit tenure, allowing individuals to align with their financial goals.
  • Opening an RD account is easy, especially if you already have a savings account with the bank.
  • While subject to penalties, RDs often allow for premature withdrawals in case of urgent financial needs.


Recurring deposit is a popular and safe way to invest money in India. It is like a savings plan where you put in money regularly. There are different types of RDs for everyone, like regular ones, ones for minors, seniors’ citizens, and even for NRIs. The flexibility in choosing how much to save and for how long makes RD an attractive investment option. They are good for both short and long-term goals.


As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.