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Fixed deposit account and Recurring deposit account, are these both similar?
In Fixed Deposits  -  Asked by Esha -  11 years ago

Best Answer:
In fixed deposit you deposit a certain some for a definite period. You can opt either for periodical(monthly/quarterly/half yearly or annually) returns or simply opt to get the amount with accumulated interest at the end of the prescribed period.
In recurring deposit, you pay a fixed amount at regular intervals(say 100 PM for 12 months). You will get back the amount with accumulated interest at the end of the prescribed period.
11 years ago - By Basu

Other Answers (1)
Answer 1.
Bank Fixed Deposits are also known as Term Deposits. In a Fixed Deposit Account, a certain sum of money is deposited in the bank for a specified time period with a fixed rate of interest.
The rate of interest for Bank Fixed Deposits depends on the maturity period. It is higher in case of longer maturity period. There is great flexibility in maturity period and it ranges from 7days to 10 years. The interest is compounded annually and is added to the principal amount. Minimum deposit amount is Rs 1000/- and there is no upper limit.
Loan / overdraft facility is available against bank fixed deposits. Premature withdrawal is permissible but some penalty is levied. Tax Deductible at Source, if the interest paid/ payable on deposit exceeds Rs.5000/- per customer, per year, per branch.

Under a Recurring Bank Deposit, a specific amount is invested in bank on monthly basis for a fixed rate of return. The deposit has a fixed tenure, at the end of which the principal sum as well as the interest earned during that period is returned to the investor.

Recurring Bank Account provides the element of compulsion to save at high rates of interest applicable to Term Deposits along with liquidity to access those savings any time.

There is great flexibility in period of deposit with maturity ranging from 6 months to 120 months. The minimum monthly deposit varies from bank to bank. In most of the public sector banks, one can start a Recurring Deposit Account with a monthly installment of Rs. 100/- only.

Loan/overdraft facility is also available against Recurring Bank Deposits.
11 years ago - By Ankur
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