5 Types of Recurring Deposits (RD) Accounts

Recurring deposit, a type of term deposit plan, is a savings-cum-investment scheme allowing small amounts of deposit at regular intervals instead of a lump sum deposit. Offered by banks and other financial institutions, recurring deposits are an ideal way to save money while earning steady returns.

There are different types of recurring deposits, each catering to the specific financial requirements of an individual. This blog will walk you through the various types of recurring deposit accounts that are available in India, highlighting their salient features and other relevant details.

What are the Types of Recurring Deposit Account?

Here is a list of different recurring deposit accounts you can avail of in 2023.

1. Regular RD Account

A Regular RD is a standard type of recurring deposit account offered by banks and financial institutions. Among the various types of RD options available, this type of recurring deposit is commonly used and is the most popular option for investors. It allows all individuals to make monthly deposits for a predetermined tenure of their choice and earn a significant interest income in return.

Tenure6 months to 10 years
Minimum & Maximum  AmountMinimum Amount: ₹100Maximum Amount: ₹15 lakhs
Interest Rate2.50% to 8.50%
EligibilityIndian Residents above 18 years of age
TaxationSubject to 10% of TDS (Tax Deducted at Source) if the interest income is more than ₹40,000

2. Senior Citizen Recurring Deposit

Unlike regular RD accounts, a senior citizen recurring deposit account is a special RD account for individuals above 60 years of age. Under this account, senior citizens can avail of additional benefits such as preferential interest rates, joint account opening and nomination facility. It also comes with an interest income that is compounded quarterly in a financial year.

Tenure6 months to 10 years
Minimum & Maximum AmountMinimum Amount: ₹100Maximum Amount: No limit  specified
Interest RateAdditional rate of  0.25% to 0.75% over regular interest rates
Eligibility Senior Citizens above 60 years of age
TaxationSubject to 10% of TDS (Tax Deducted at Source) if the interest income is more than ₹50,000

3. Flexi Recurring Deposit

Another addition to the list of recurring deposit types is the Flexi Recurring Deposit. In this account, the principal amount or monthly instalments can vary, depending upon the suitability and convenience of an investor. It allows all eligible entities to deposit a flexible amount at any time during the month without incurring any penalties. A depositor is also allowed to withdraw their RD investment before maturity from a Flexi account.

Tenure6 to 120 months
Minimum & Maximum AmountMinimum Amount: ₹25Maximum Amount: No limit
Interest Rate7.00% to 7.50%
EligibilityIndian Residents, Senior Citizens,  Corporates, Partnership/ Proprietorship Firms, Hindu Undivided Family and Trusts
TaxationSubject to 10% of TDS (Tax Deducted at Source) if the interest income of regular citizens is more than ₹40,000 and for senior citizens the same is more than ₹50,000

4. Recurring Deposit for Minors

While minors cannot avail of the benefits of a regular RD account, they can apply for a special recurring account. This special account is only applicable to individuals under guardianship who are below 18 years of age. An interesting fact about this recurring deposit is that it generates higher returns compared to a regular RD.

Tenure6 months to 10 years
Minimum & Maximum AmountMinimum Amount: ₹50Maximum Amount: No limit
Interest Rate5.80% to up to 7.80%
EligibilityIndividuals below 18 years of age
TaxationSection 10 (32) of the Income Tax Act

5. NRE/NRO Recurring Deposit 

An NRE/NRO recurring deposit account exclusively caters to the financial requirements of Non-Resident Indians, allowing them to earn high-yielding on their foreign income or savings. However, such accounts usually have a minimum tenure of 1 year while the interest is compounded every quarter in a financial year.

Tenure1 year to 10 years
Minimum & Maximum AmountMinimum Amount: ₹5,000Maximum Amount: ₹1,00,000
Interest Rate7.25% to 8.20%
EligibilityNon-Resident Indians and Foreign Nationals
TaxationWhile the NRE RD account is exempt from taxation, the NRO RD account is subject to taxation

Features of RD 

Let’s dive into some of the salient features of a recurring deposit, making it a reliable savings and investment option.

  • Compared to other investment options, a recurring deposit has the lowest minimum deposit requirement, making it accessible to individuals with varying income levels.
  • While its maximum tenure extends to 10 years, you can choose a flexible time period that works for you and aligns with your financial planning.
  • An RD scheme offers higher returns than a regular savings account.
  • By investing in an RD scheme, depositors can further avail loan/overdraft facilities amounting to up to 95% of their investment.
  • The amount of interest earned from an RD scheme is a part of the depositor’s taxable income.


Hopefully, now you have a clear idea about the different types of recurring deposit accounts. Each type of recurring deposit account has varying features, tenure and interest rates. Before prioritising any RD account, make sure to compare and verify all terms and conditions of each type. Choosing an RD account that generates suitable returns as per your financial requirements will be in your best interest.


Scroll to Top