HDFC Recurring Deposit

HDFC Bank offers flexible Recurring Deposit schemes to its customers that are tailor-made to suit their needs. Even though the basic working principle is the same as recurring deposit schemes offered by other banks, there are some facilities that HDFC Bank offers on RD accounts that customers cannot find at other banks.

Here are the types of HDFC Recurring Deposit schemes:

• HDFC Regular Recurring Deposit
• HDFC NRE Recurring Deposit

HDFC Bank customers can open a Recurring Deposit (RD) account with the bank to avail the benefit of this deposit scheme. This deposit scheme is available to residents of India. Here are the features of the regular RD scheme offered by HDFC Bank:

• Customers can invest a minimum of Rs. 1,000 and a maximum of Rs. 14,99,900 per month in their RD accounts
• They can pay their monthly instalments by HDFC Bank net banking or schedule standing instructions so that the bank can transfer the monthly instalments from their savings account automatically every month on a specific date
• The interest rate is same as that on regular Fixed Deposits (FDs) and is paid at maturity of the RD
• The minimum and maximum tenure for regular recurring deposits is 6 months and 10 years respectively
• The interest earned on a Recurring Deposit (RD) is taxable if it exceeds Rs. 10,000 in a financial year. TDS is not deducted by the banks but the customer has to mention the interest earned on an RD while filing Income Tax returns
• Customers cannot make partial payments of instalments even though the bank offers them a grace period of 5 days after the instalment due date to deposit the monthly instalment
• The minimum lock-in period for an HDFC Recurring Deposit account is one month. If the customer decides to close the RD account within a month, the principal amount is refunded but no interest is paid
• HDFC Bank customers can convert their recurring deposit into a Fixed Deposit (FD) at maturity easily

Non-Resident Indians (NRIs) can open a Recurring Deposit (RD) account with HDFC Bank to avail the benefits of this RD scheme. Here are the features of the NRE Recurring Deposit scheme:

• Customers can invest a minimum of Rs. 1,000 and a maximum of Rs. 14,99,900 per month in their RD accounts and the instalment once set cannot be changed
• Customers cannot make partial payments of instalments or partial withdrawals on their RD account
• The interest rate is same as that on NRE Fixed Deposits and is paid at maturity of the Recurring Deposit
• The minimum tenure for this RD scheme is 12 months and the maximum tenure is 10 years respectively
• The principal and interest are tax-free in India as well as fully repatriable
• HDFC Bank offers a grace period of 5 days which means the customers can deposit the monthly instalment within 5 days of the due date without the need to pay penalty for late payment
• The minimum lock-in period for an NRE HDFC Recurring Deposit account is one year. If the customer decides to close the RD account within 12 months, the principal amount is refunded but no interest is paid
• HDFC Bank customers can convert their recurring deposit (RD) into a Fixed Deposit (FD) at maturity easily by setting instructions in advance

Q: Does HDFC Bank deduct TDS on RDs?

A: No. As per the existing tax rules, TDS is not applicable on recurring deposits. However, interest earned over Rs. 10,000 in one financial year is taxable and the customers need to declare it while they are filing their taxes.

Q: Can I change the instalments to my RD account?

A: No. You cannot increase or decrease the instalments on your RD account once you have opened the account. You need to deposit the monthly instalments on your account before the due date to avoid penalties.

Q: Can nomination facility be availed on Recurring Deposit accounts?

A: Yes, HDFC Bank offers nomination facility on RD accounts. If a Recurring Deposit (RD) account is opened in an individual’s name, a nominee can be added to the account. If there is a nominee selected for the Savings Account, the same nominee can be added to the RD account. If the RD is opened in a joint name, only the nominee selected for the savings account can be chosen as the nominee for the RD account.

Q: Can I withdraw a portion of the amount in my HDFC Recurring Deposit account?

A: HDFC Bank does not allow partial withdrawals on recurring deposit accounts. However, if you want to close your RD account, you can do so easily. If the lock-in period is complete, you will earn an interest on your principal and the amount will be refunded but if you withdraw in the lock-in period, no interest is paid and only the principal is refunded.