Recurring deposits have over the time emerged as a safe and convenient investment option for the small investor. The word safety gets associated with the fact that it is a low risk instrument mostly offered by banks. At the same time, convenience comes with the fact that recurring deposit allows monthly investment of as low as Rs 100.
Public sector lender IDBI Bank also comes with a recurring deposit scheme to benefit the small investor.
The depositor is able to start his account with a monthly deposit of Rs 100 only which can reach to as much as Rs 1 lakh per month. And this is one of the biggest advantages of recurring deposits over other short term investment plans like SIP.
The bank offers the facility to the customer to get the monthly deposit amount deducted from his savings account with the bank.
There is no deduction of TDS ( tax deducted from source) on recurring deposits of the bank.
The bank presently offers 50 basis points higher interest to senior citizens. In case of premature withdrawal of the deposit senior citizens get to avail the additional 50 bps only if they have maintained the deposit with IDBI Bank for atleast 12 months.
Following are the prevailing interest rates offered by the bank on recurring deposits.
|Tenor||general citizens||senior citizens|
|>1 Yr - 7 yrs||9.25||9.75|
|>7 yrs - 10 yrs||9.00||9.50|
The rates are with effect from June 21, 2011.