State Bank of India (SBI) the largest public sector bank in India offering a diverse range of deposit schemes for individuals. It offers both short term and long term schemes. Recurring deposit is one of them. We are going to cover how to open recurring deposit account in SBI in this article, its features, and other details.
But before moving to the process of opening a recurring deposit account in SBI let’s understand first what is Recurring deposit or RD?
Contents
What is Recurring Deposit (RD)
Recurring deposit is generally referred to as RD. It is a deposit scheme that enables an individual to deposit a fixed portion from their regular income and earn interest on the deposited amount at the applicable rate.
Like fixed deposit (FD) recurring deposits also help to build a corpus over time by depositing some amount each month.
Features & Benefits of Recurring Deposit (RD)
There are many features and benefits of RD. Some of them are listed below.
- You can start RD with a small amount of Rs. 100 in SBI.
- RD services is available to all the branches of SBI.
- The tenure of the deposit period is minimum 12 months and maximum 120 months.
- The loan is available up to 90 % on the deposited amount available. SBI also allows its customers the facility of overdraft on the deposited RD amount.
- RD is transferrable among all the branches of SBI.
- Universal Passbook is issued for specific schemes.
- TDS charges will be applicable means the interest earned is taxable under the income tax Act of 1961.
Procedure to Open Recurring Deposit Account in SBI Online
The process is quite simple and easy. Customer should have their account in SBI.In order to apply online, you should have access to internet banking. Follow the steps below.
- Visit SBI Internet Banking Portal and click on Personal Banking.
- Log in using Username and Password.
- Tap on the fixed deposit tab on top of the page and select Recurring Deposit (e-RD).
- Select type of deposit account and click on Proceed.
- Choose the account number you want to link to your RD and Enter the amount. check the box Senior Citizen if applicable. Enter tenure of deposit as well.
- Now choose Maturity instructions for your RD account i.e. Payback Principal and Interest or Convert to STDR (FD), select RD creation mode, select tenure at the time of Renewal, check the box I accept terms & conditions, and click on Submit.
- On the next window check the details and click on Ok.
- You have successfully created RD now, you will see the details on the screen along with the reference ID.
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SBI Recurring Deposit (RD) Interest Rate
| Tenure | Interest Rates (p.a.) for Public | Interest Rates (p.a.) for Senior Citizens |
|---|---|---|
| 1 year to less than 2 years | 5.50% | 6.00% |
| 2 years to less than 3 years | 5.50% | 6.00% |
| 3 years to less than 5 years | 5.70% | 6.20% |
| 5 years to 10 years | 5.70% | 6.50% |
Charges on SBI Recurring Deposit (RD) Account
SBI also put charges and penalties under certain circumstances. you can the examples below.
- Whenever a depositor fails to pay the installment on the due date for three consecutive months the service charge of Rs. 10 is applicable.
- For an account with a maturity period of 5 years or less, a penalty of Rs. 1.50 will be applicable on every Rs. 100 in case an individual failed to pay monthly installments.
- For an account with a maturity period above 5 years, a penalty of Rs. 2.00 will be applicable on every Rs. 100.
- In case if an individual fails to pay six consecutive installments, the account shall prematurely be closed and the balance paid to the account holder.
Conclusion
We have learned how to open a Recurring deposit account in SBI online. I hope this information will help you open an RD account online.
FAQs
1: What is the minimum and maximum tenure for recurring deposit?
The minimum is for 12 months and maximum for 120 months.
2: Can I transfer maturity amount to any of my accounts?
No, the maturity amount will automatically be transferred to the account from which the installment was debited before.
3: Can I close my RD account online?
Yes, you may close your RD account online through the “Close A/c” tab under e-RD, which is created through e-RD only.
RD account created through branch can not be closed online.you have to visit branch for this.
4: What are the changes for Premature closure?
For Term Deposit up to Rs 5.00 lakhs, the penalty for premature closure charges will be 0.50% (all tenors)
For Term Deposits above Rs. 5 lakhs, applicable penalty for premature closure will be 1% (all tenors).
5: How much interest I will get if I close my RD account with in 7 days?
No interest will be paid on Deposits which remain for a period of less than 7 days.
6: What are the maturity instructions in RD account?
You have two options to choose from while opening e-RD i.e. Payback Principal and Interest or Convert to STDR as maturity instruction for your e-RD.
Payback Principal and Interest option will transfer the maturity amount to your debit account on the maturity of e-RD.
Convert to STDR option will create a fixed deposit for a period selected by you with the maturity amount of e-RD.
7: How can I cancel my standing instruction for e-RD online?
- Log in to SBI internet banking.
- Click on Request & enquiries.
- Select the Standing instructions link.
- Now select View/Cancel.
- Select type on transactions.
- Now choose to cancel SI.
8: Will Senior Citizens get additional rate of interest on recurring deposit?
yes they will get an additional rate of interest on RD.
9: What is the minimum amount I can deposit in RD?
You can open RD account in SBI just by depositing Rs.100.
