Recurring Deposit(RD) means making regular deposits into a specific bank account. Almost all banks have RD accounts for their customers to deposit money in to get better returns. An RD account has a few rules throughout deposit and the rate of interest that customers receive.
It is an excellent way of starting some considerable monthly savings while only making small investments each month. On maturity, this will eventually become a large sum along with interest. You can open an RD account for as little as six months or even ten years.
It's pretty flexible where almost anyone can gain access to an RD account, encouraging people to grow their saving habits. The rate of interest on an RD account has been stipulated between 4-5% p.a. Therefore, if you want to start saving, an RD account is a great way forward.
However, it sometimes becomes difficult for RD account holders to calculate their investments and returns. That's where an RD calculator comes in handy. It can calculate the returns by simply inputting the different variables.
Apart from helping with the calculations, an RD calculator SBI is a great way to keep track of your finances, saves your time, eliminates manual calculations, and gives you an accurate estimate of your finances.
The only thing that the investor needs to do is calculate the deductible TDS from the total amount, as per the RBI guidelines.
An SBI RD calculator works on the same principles. You can calculate the sum at maturity to get a clear picture of your investment. It is helpful when the depositor wants to withdraw the amount prematurely.
If you are an RD account holder or are interested in becoming one, an RD calculator is a great way to keep track of your investments.
How to use an RD calculator SBI?
The RD calculator SBI can be used online for free on several third-party websites. It is simple to use, and almost anyone with minimal knowledge can use it. It will help input a few variables to allow the calculator to calibrate the correct estimate.
The three main components or variables of the SBI RD calculator are:
Amount of Deposit: This is the amount that you plan to invest into your RD account, per month or per quarter. It can range from 500-10,00,000. This amount will be the basis on which you will be paid the interest.
Tenure: This is the time being for which you will keep depositing money into the account. It can range from 6 months to up to 10 years. The higher the time, the higher will be your rate of interest.
Rate of Interest: Now, your bank will give you the interest rate based on your period. This rate of interest gets added at quarterly or annual intervals.
All you need to do is enter all the above components into the website. Check for any errors before the input and once it's all filled in, click on Calculate. Next, you'll be able to check your amount at maturity, which will help you get a good look at your financial needs.
You can even change the amounts of the different components to estimate various variables that you'd like to calculate.
What are the benefits of using an SBI RD Calculator?
Several benefits come with using the SBI RD calculator. It is a simple and easy way to calculate your finances and also helps you to keep track of your financial health. But to give you the whole picture, we have listed down some of the most valuable benefits of the SBI RD calculator:
Easy to use: It is one of the most significant advantages of the calculator. It is so simple that almost anyone can use it. It is pretty straightforward with all the information that needs to be put in for easy and fast calculation.
Time-Saving: The calculator eliminates the need for any manual calculation. This helps you save time since the calculation happens in seconds.
Accurate: It gives you accurate results since everything is mechanical. It provides zero room for error and always gives you the correct answers.
Accessible: It is easy to access and gives you a clear picture of how much you want to invest. It can help you plan your future.
Free: The calculator is free for anyone's use and can be found on the internet with ease. It makes the calculator easy to use over and over again.
Therefore we can say that if you want an accurate calculation for your investment that is also fast and easy, then an SBI RD calculator is your go-to choice.
What is the current SBI RD interest rate?
You need to fulfil a few requirements to open an RD account, but before opening an account, you must know the various services offered by the bank. If you don't get enough interest rates, then why would you invest in a particular scheme.
So to gain thorough knowledge about interests provided by SBI on RD accounts, we have listed below all the terms and conditions that need to be followed.
In 2022, SBI stated that a depositor could open a recurring deposit account with a minimum of Rs. 100. The tenure for a regular deposit account can range from 12 months to 10 years.
These guidelines apply to every customer, but the interest rate for an ordinary citizen on a deposit below Rs. 2 crores is 5.00%-5.40%p.a. In contrast, that rate of interest is hiked for senior citizens by 0.50%-0.80%.
How to open an SBI RD account?
After looking at the various factors about an RD account, you would like to know how to open an RD account with SBI. SBI offers high rates of interest and flexible schemes that anyone can avail of.
Having an SBI account can come in handy in many ways, as you can use it to gain online discounts. So, if you want to open an RD account with SBI, you can do it in two ways. You can either visit the nearest SBI branch to open an account or do it online.
To go through the physical process of opening your bank account, there are a few steps that you must follow:
First, visit the nearest SBI bank branch and ask for an RD account opening form.
Once that form has been procured, fill in all the details asked for.
Once you fill in all your details correctly, you will be asked to submit a few documents.
Your recent passport-size photo will be required to be pasted onto the form.
You will also be required to submit your KYC document.
If you are an individual or a company, you must also deposit a copy of your PAN card, Passport, Adhaar Card, Voter's ID, and Driver's License(if available).
If you want to open the account under HUF, you will be required to deposit a self-attested PAN card, HUF declaration deed, and bank statement of the HUF.
Lastly, if you want to open the RD account on behalf of a partnership firm, you need a certificate of incorporation, Partnership deed, and ID proofs of all authorized signatories.
Also, on the other hand, if you want to open an SBI RD account online:
You must have a savings account with SBI first. If you don't, then you must open a savings account first.
After your savings account has been opened, you open an e-RD account on the SBI web portal.
Another requirement for opening the e-RD account is that your savings account must also be linked to the online app.
For doing so, you have to log in to your bank account on www.sbionline.com.
Once you have logged into your bank account, you must find the Request Tab and click on the e-RD/e-SBI Flexi Deposit link.
Next, select the savings account from where the deposit account will be deducted.
Finally, go through the terms and conditions. Then, click on submit, and your bank account will be opened.
Once your account matures and the tenure is over, the total amount will be directly deposited to your savings bank account to help you with easy access to your deposit.
The account opening process is quite simple. The only strict requirement is a savings account in SBI, which is also easy to open. All you need to do is deposit the required amount into your bank account, while the rest will be taken care of by the bank.
What are the documents required to open an RD account in SBI Bank?
It is easy to open an RD account in SBI, but you will need a few sets of documents that you must have. To make it easier for you to open an SBI RD account, we have stated below the documents that you will need to open your bank account.
A filled and duly signed RD account.
One recent passport-size photograph.
KYC documents for both individuals and companies: A copy of your PAN card, a Passport copy, a copy of your Aadhaar Card, your Voter's card, and Driver's License(if any).
If you belong to HUFs, you must also have a HUF declaration deed, a HUF bank statement, and a self-attested PAN card.
If you are opening the RD account as a partnership, you will need a certificate of incorporation, partnership deed, and ID proofs of all authorized signatories.
Lastly, there are a few eligibility criteria that you must meet to be able to deposit money into the bank account:
You must be a resident individual.
It would help if you were an NRI(Non-Resident Indians) or a PIO(Person of Indian Origin).
An organization can also open an RD account.
You can also be a sole proprietor.
You can be HUF.
It can be trusts and companies.
Partnership firms can also open an RD.
Finally, so can public or private limited companies.
Now that you have a complete understanding of a recurring deposit account, you can start a new account and use it to make good savings. The interest rate is also quite good on recurring deposits, and it will cultivate your savings habit.
Recurring deposit account is a fantastic way to start. These days, with RD calculators and linking of your savings account with the recurring deposit, it has become more accessible and more effective for anyone.
We hope this article has helped you figure out the intricacies of SBI RD accounts and RD calculators. These things come in handy in this digital age. If you have further questions, you can browse our FAQ section to gain further details.
Frequently Asked Question
Q1. How is RD maturity calculated in SBI?
The RD maturity of SBI can be easily calculated using an SBI RD calculator. This SBI calculator can be found on almost any third-party website. The calculator is easy to use and gives you accurate results calculated very fast. This calculator can be used by almost anyone and at any time.
Q2. What is the RD rate in SBI?
In the current fiscal year 2022, SBI has set the rate of interest of an RD account for a regular citizen around 5.00%-5.40% p.a while for a senior citizen, it is capped at around 5.40%-6.20% p.a. This rate of interest is applicable for RD accounts whose tenures range between 12months to 10 years.
Q3. Is SBI good for RD?
SBI is undoubtedly the best bank to have an RD account in India. It has the highest interest rate with the lowest amount of deposit for anyone. Even the tenure is relatively minimal at SBI, and the returns are pretty good.
Q4. Can I close my SBI RD account before maturity?
Yes, it is possible to close your SBI RD account before maturity. But the only downside with premature closure of your RD will lead to low returns on the account. Therefore it is usually advised to close your account upon maturity or when you have a significant amount deposited in your recurring deposit.
Q5. What is the penalty for premature closure of RD in SBI?
A penalty will be deducted upon the premature closure of your SBi RD account. If the term deposit is up to 5 lacs, then the sentence to be removed is 0.50% of the total amount, while for deposits exceeding five lacs, the penalty will be 1%.