Savings, Savings and Savings is what we all think for when we look at our monthly expenses. When we see how much we have spent in the whole month and we are running out of savings then we think of opting in into some investment instruments which will help us to save some money. Recurring deposit is one of the investment instrument which will help you save money every month in a systematic way, there are many other investment instruments about which you can think of investing your money in Public Provident Fund, (PPF) Fixed Deposit (FD) etc.
It’s your choice you can invest your money in any of the invest instrument which you think can benefit you. There are many advantages and disadvantages of all the investment schemes but it is we who have to choose to the right one for us. We all have a saving bank account in which we get our salary but we don’t like to keep our money in our SB account. Because we don’t get enough interest on the money we keep in our saving bank, like State Bank of India which is one of the biggest and most trusted bank in India they give 4% interest on saving bank account per annum.
I am not telling that we don’t get more interest rates on Saving bank accounts, there are some banks which are playing very good when it comes to offering interest on saving bank account. Recently I was reading some stuff to know more about the interest rates we get on various investment options I came across RBL Bank’s Advantage account in which you will get 7.1% Per annum along with some amazing features of debit and credit cards.
I am not aware of the terms and conditions of this Advantage account, but you can read more about that on their official website. I have mentioned in the starting part of this article that every investment option or instrument has it’s own advantages and disadvantages so I have mentioned them below.
You can read about the banks who offer highest interest rates on saving bank accounts by following this link. And when it comes to saving bank account there are many hidden charges in saving bank accounts, if you wish you can read them by following this link.
Advantages of Recuring Deposits:
First, let us check out the advantages which you will get if you open an RD account and invest in that account.
- When you invest in RD account then returns are fixed and with high-interest rates when compared to savings bank accounts.
- With RD accounts you can invest systematically like if you want to buy a car next year you can invest money for your car in this account and you will get the maturity amount at the time of buying a car.
- Even recurring deposits offer fixed interest rates but the interest rates do not fluctuate like it does in Fixed deposits, it says fixed interest.
- There will be no TDS applied on the interest earned, after maturity, the full amount + full interest earned will be deposited into your account.
- When you open any of the banks which offer recurring deposit accounts in India then your RD account will be linked with your saving bank account. You can easily transfer money from your SB account to RD account every month, there is no need to visit bank branch every month.
Disadvantages of Recurring Deposits:
So now check out the disadvantages.
- These accounts are not like your simple SB accounts where you can deposit or withdraw money as you wish. The money can be withdrawn only after maturity.
- When you are opening an RD Account in India the bank will ask you the amount which you will be depositing in your Recurring deposit account every month. That amount is fixed and can’t be changed.
- There are many other investment plans which offer better interest rates when compared to RD Accounts.
So these were the advantages and disadvantages of RD, now let me tell you what is the difference between Fixed Deposit (FD) and Recurring Deposit (RD) after that I will tell you the complete procedure which you need to follow to open a recurring deposit in SBI Online.
What is the difference between Fixed Deposit and Recurring Deposit?
Now both of these are investment options which help us to save some money and along with that, we get interest on the money we keep in Fixed Deposit or Recurring deposit. If you invest in both you will get fixed income with zero risks which means your investment is not in any kind of risks, you will get the returns for sure soon after your FD or RD’s tenure gets over.
Let us discuss the differences between these two now while in Fixed deposits the interest rate fluctuates but in Recurring deposit the interest rate will not fluctuate it will stay constantly the same. In FD you have to invest a big amount of money at once for example if you want to open an FD of Rs. 2 Lakh then you have to get that amount of money ready at once. And in the case of RD you can invest monthly in it there is no need to arrange the big amount of money at once.
And in the case of RD you can invest monthly in it there is no need to arrange the big amount of money at once. These are the few points which make difference between these two investment options.
Step by Step Procedure to Open Recurring Deposit in SBI Online
So now let us get started with this guide and check out the procedure to open recurring deposit in SBI Online. Basically, to open a State Bank of India RD the account holder or customer have to visit onlinesbi.com (official bank website) and login into their internet banking account and click on e-Fixed deposit tab.
Before we proceed to the further part of this article let me tell you that you should have an active internet banking account to open recurring deposit in SBI Online. If you have an active internet banking account then you can proceed to the further part of this guide but in case you have not activated your it yet then you can get it activated by following the steps mentioned below.
Activating Internet Banking in SBI.
- First of all, you need to visit SBI online and click on New User Registration.
- When you click on that you will be redirected to a new webpage in which you will be asked to enter your account number, registered mobile number, Account CIF number etc. fill everything and choose the country as India.
- Now click on Submit, once you click on submit you will receive OTP (one-time password) to your registered mobile number. Enter that mobile number there and you will be asked to create a username, login password, and profile password.
- Create them all and you are done with it.
Procedure to open Recurring deposit in SBI Online:
Now let us move to the further part of this guide and open an RD for you in SBI Online through internet banking.
- The first thing you have to do is opening Onlinesbi.com and click on Login under personal banking section of the page.
- Now you will get space to enter your username and password, enter them and click on Login again. You can refer the image which is embedded below.
- Once you enter your username, password, and successfully login into your internet banking account you will see the homepage of SBI Net banking.
- Now click on e-Fixed Deposit which you will find in the upper menu of your Net banking interface, you can refer the image embedded below.
- After that click on e-RD / e-SBI Flexi Deposit which you will find in the left sidebar of your internet banking interface.
- You will get two options on your screen now, click on e-RD (Recurring Deposit) and click on Proceed button.
- You will be asked to select the account number from which you wish to debit the amount every month, you have to select this only when you have multiple accounts in SBI. But if you have only one account then there is no need to select the account it will be selected by default.
- Enter the amount of which you want to open the RD.
- If you are a senior citizen then tick mark it.
- Now comes the tenure selection of the recurring deposit, you can select the tenure or period of RD in years or months.
- And finally, you have to select maturity instruction for your RD account.
- Read all the terms and conditions carefully, you can read the terms and conditions by following this link too. Once you read them all carefully click on Submit.
So this was the online procedure to open Recurring Deposit in SBI Online through internet banking.
You can check the SBI Recurring Deposit Rates by following this link.
Before opening RD in SBI consider reading this table below to know the RD rates of different banks in India, which will be beneficial for you and will help you get more interest on your money.
|Bank. (Financial Institution)||Maturity Time||Interest Rate % Per Annum|
|Kotak Mahindra Bank||1 Year||7.90%|
|Yes Bank||1 Year||7.75%|
|State Bank of Hyderabad||1 Year||7.75%|
|IDBI Bank||1 Year||7.75%|
|Punjab National Bank||1 Year||7.50%|
|HDFC Bank||1 Year||7.50%|
|Axis Bank||1 Year||7.50%|
|State Bank of India||1 Year||7.25%|
|City Union Bank||1 Year||7.1%|
|Canara Bank||1 Year||7.15%|
|Bank of Maharashtra||1 Year||6.75%|
|Bank of Baroda||1 Year||7%|
|Bandhan Bank||1 Year||8.25%|
|Andhra Bank||1 Year||7%|
We have tried our best to keep this table to updated with the latest interest rates as on 3 January 2017 but we strongly recommend you to get this verified with the respective bank and if you find any outdated data in this table please let us know about it by commenting below.
We hope you have understood all the steps which are involved in opening recurring deposit in SBI Online, if in case you have any kind of doubts then you can leave your comment below we will respond to your comment as soon as possible to us. You can also get your doubts cleared by calling State Bank of India customer care at their toll-free number 1800 425 3800.