Here are 10 things to know about SBI 's recurring deposit (RD):
In SBI RD account, customers are required to make monthly deposits of a minimum Rs 100 and in multiples of Rs 10 thereafter. There is no maximum limit on the deposits.
The minimum period of RDs is 12 months while the maximum is 120 months, according to SBI. (Also read: All You Need To Know About SBI Flexi Deposit Scheme)
The interest rate payable to SBI staff and pensioners is kept at 1 percentage point above the applicable rate. The rate applicable to senior citizens is 0.50 per cent above the applicable rate, according to the SBI website.
Passbooks are also issued for RD accounts.
The recurring deposit account is subject to tax deducted at source. However, form 15G/H can be submitted by the depositor to get exemption from tax deduction as per income tax rules.
Transferability among branches is also allowed in case of SBI RD account.
SBI imposes the following penalty charges for non-deposit of monthly instalments in case of a RD account: for account of period five years and less - the bank charges Rs 1.50 per Rs. 100 per month and for account of period above five years- the lender charges Rs 2 per Rs. 100 per month.
A service charge is levied on recurring deposit accounts paid out on or after the date of maturity, wherein there is default in payment of three or more consecutive instalments and the account has not been regularized, according to SBI.
In case six consecutive instalments are not received, the account is prematurely closed and balance is paid to the account holder. Instructions for disposal of maturity proceeds are accepted at the time of opening of accounts, said SBI.
Premature withdrawal is allowed on RDs and for this, rules for fixed deposits (FDs) or STDR (special term or fixed deposits) are applicable.