NRE RECURRING DEPOSIT BENEFITS

Recurring deposit is very popular in salaried class resident Indians, but I personally feel that this is the best way to save for future planning’s as it locks your present rate of interest for future savings , say if a persons invests in fixed deposit today he will get today’s rate of interest and after 6 month if he will again deposit in FD then he will be getting the then prevailing rate of interest , but in RD if you opt for a period of 10 years then each and every instalment will get the benefit of today’s rate of interest

 Maturity values for different interest rates and period

 If a person starts a NRE RD of Rs. 10000.00 and his bank offers interest rate at 8.50% then maturity value for different period will be as under

i)        For 12 months (1 year)     =       1.24 lacs (approx)

ii)       For 36 months (3 year)     =       4.08 lacs (approx)

iii)      For 60 months (5 year)     =       7.44 lacs (approx)

iv)      For 120 months (10 year)  =       18.81 lacs (approx)

 

Normally Banks are charging penalty @ Rs.1.5 to Rs.2.00 per Rs.100 per month for delayed payment of instalment

In case of premature withdrawal, banks are usually giving the interest 0.50% below the rate applicable for the period the deposit remains with the bank or 0.50% below the contractual rate which ever is lower

If you break this deposit before 1 year, you might not get any interest

 

For other details / queries, drop a mail at prashant.singh@sbi.co.in