What are flexible recurring deposits and their features?

NEW DELHI: Amongst the most popular saving instruments,

flexible recurring deposits

are the ones that allow the depositors to deposit a lump sum amount whenever convenient.

You can open a flexible recurring deposit with a core amount for a particular time period only if you have a savings or current account with the particular bank to transfer the amount.

There are two sections in the flexible recurring deposits:

Inclusive of the core amount: These are the deposits that are made by the account holder at the time of opening of the RD.

Flexible amount: The amount of the monthly installments are not fixed here. The amount can be deposited as per the availability.

Once the amount is matured, it is transferred to the linked account. Besides, 10 percent of TDS is deducted on the interest that is earned on the recurring deposit for an amount more than Rs 10,000.

Features of flexible recurring depositAs compared to the recurring deposits, flexible recurring deposits have various features that make it attractive amongst the account holders. Given below are a few:

• Account holders can open the flexible recurring deposit with a core amount and further can add the variable amount as per their convenience and availability.
• There is a certain amount limit that is fixed by the bank and one cannot exceed the limit for depositing the amount.
• The rate of interest is applicable as per the RD rates tenure on the core amount that is deposited. While the rate of interest is applicable to the variable amount from the date of deposit.
• You must deposit the core amount on the particular date to escape from penalty. Whereas, there is no penalty on the variable amount.

So by considering to invest in the flexible recurring deposits, you get to save money as and when it is available. And also have the option to cut short the deposit amount if there is money shortage.

Here are some of the most common questions asked about flexible recurring deposits:

1. What is a flexible RD?Flexible recurring deposit is the one that allows the depositors to deposit a lump sum amount whenever convenient.
2. Can I withdraw money from flexible RD?No, you cannot partially withdraw money from your flexible RD.
3. What is the minimum amount limit for

   Flexi RD

   ?A minimum of Rs. 5,000 can be deposited in a Flexi RD.
4. Can senior citizens avail additional rate of interest on Flexi RD?Yes

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