Senior Citizens Recurring Deposit Account FAQs

An RD is a type of fixed deposit where the depositor makes regular deposits at a fixed interval. The interest earned on the deposit is compounded and paid out at the end of the deposit term.

The eligibility criteria for opening an RD account for senior citizens varies from bank to bank. The depositor should be 60 years or above and the account can only be opened in the name of the senior citizen.

The interest on an RD account for senior citizens is paid only upon maturity only. There is not any monthly or quarterly interest payouts before maturity.

The minimum age to open a Senior Citizen RD account is 60 years and there is no maximum age limit.

The minimum deposit amount for Senior Citizen RD varies from bank to bank and can range from Rs. 100 to Rs. 1000. There is no upper limit on the deposit amount.

The tenure for Senior Citizen RD can be opened for a minimum period of 6 months and thereafter in multiples of 3 months upto a maximum period of 10 years, depending on the bank.

The interest rate offered on RD accounts for senior citizens varies from bank to bank. However, the interest rate is generally higher than regular RD schemes. The interest rate for Senior Citizen RD varies from bank to bank and depends on the prevailing market conditions. Currently, the interest rate for Senior Citizen RD ranges from 5.50% to 8%.

Yes, premature withdrawal is allowed, but it is subject to penalty charges. The penalty charges vary from bank to bank.

factors to consider before opening a recurring deposit account include minimum amount of installment, tenure, interest offered and withdrawal facility offered by the bank.

Yes, some banks offer a loan against Senior Citizen RD accounts. The interest rate for such loans is usually lower than that of personal loans.

Yes, nomination facility is available for Senior Citizen RD accounts. It helps in the easy transfer of the RD amount to the nominee in case of the depositor's unfortunate demise.

In case, someone defaults frequently in monthly instalments, the bank has the right to close the concerned RD account. In such cases, the interest rate applicable will be as per the bank's premature withdrawal policy.

Yes. Interest rates on RD accounts are higher for senior citizens usually by 50 basis points or 0.50%.

No, partial payment of instalments is generally not allowed.

Yes, there is a penalty if senior citizens withdraw money from their RD prematurely which is decided by banks individually.

No, RD tenure cannot be changed once the RD account has been opened.

Yes, TDS at the rate of 10% will be deducted, if the interest payable exceeds Rs.50,000 for senior citizens in a year.

Minimum tenure for Recurring Deposit Scheme for senior citizens is fixed at 6 months by most of the banks in India.

No, a you cannot change the instalment amount after RD account has been opened.

You can open an Recurring Deposit account for senior citizens through any of the following ways:

• Visit the nearest bank branch and submit the required documents.
• Open an account online through the bank's website via Net banking.
• You can open RD account through the bank's mobile app.
• Call the Bank customer care number and request for an account opening.
• Some banks also give facility to open RD account via SMS

Manual RD return calculation is possible with the formula A = P(1+r/n) ^ nt, where 'A' is final amount, 'P' is principal, 'r' is annual interest rate, 'n' is the number of times that interest has been compounded and 't' is the RD tenure, but it can be challenging. This is why an RD calculator can be of immense help.

While you use the Recurring Deposit Calculator, you need to enter your monthly deposit amount and tenure (in years and months). Once you do so, the calculator will show you your total savings and interest earned on your RD in a fraction of second.

Yes, there is a penalty if you don't pay the required monthly deposit on time for your RD. It depends upon your bank's policies to decide the rate of penalty. Thus, it is better to check your bank’s terms and conditions for the same.

Interest earned via RDs is taxable according to the tax slab that you fall in.

Senior citizens RD is taxable only if the interest earned on RD exceeds Rs.50,000.

Yes, there is a tax benefit for investing in an RD account for senior citizens. The depositor can claim a deduction of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961, on the amount invested in the RD scheme. Please note that the tenure of such RD should be atleast 5 years.

Yes, most of the banks allow you to close your RD account online through internet banking which are created online only. RD accounts created through any other means usually cannot be closed online through internet banking.

Yes, TDS is applicable as per prevailing Income Tax rules. The Bank will issue TDS Certificate for the tax deducted.

To apply for the Recurring Deposit Scheme for senior citizens, one needs to submit the following documents:

• Identity proof, which can be a Voter ID card, PAN card, Aadhaar card or Passport.
• Address proof, which can be a Voter ID card, Aadhaar card or passport.
• Age proof, which can be a birth certificate or any government-issued document that states the applicant's age.
• 2 passport size photograph.

Yes. You can cancel your standing instructions anytime.

You can debit a savings or a current account to open RD account. Such account should be active account and should not be a dormant/ inactive account.

Yes. Many banks allow their customers to convert their RD to FD on maturity.

No. Usually, RD interest rates and FD interest rates are the same across tenure.