1. Home
  2. Banking
  3. Tax
  4. Forms
  5. ppf - ssy
  6. Sr. Citizen
  7. Widgets
  8. Misc.
  1. Home ➤ 
  2. Banking ➤ 
  3. You Are Here

RD Accounts / SIP Accounts

(RD) Recurring Deposit / SIP (Systematic Investment Plan) accounts provide the facility of saving small amounts of money every month to meet future financial goals. The scheme is also called by the name Systematic Investment Plan (SIP). The investment in Recurring Deposit / SIP accounts earn interest at the rates applicable to Time / Fixed deposits for the corresponding period of investment.

These accounts are ideal for investors, who want to plan to save / invest a fixed amount of their income at every month and earn relatively higher interest on their investments for future liabilities like education and marriage of children, purchase /construction of house etc.

Salient features of Bank RD / SIP Accounts


Adult individuals, singly or jointly with other adults


The requirements for opening of accounts are the same as mentioned under Savings Bank Accounts.

Usually Recurring Deposit Accounts are maintained by banks for Saving Bank / Current Account holders only.

Minimum amount

₹ 100/- per month. The minimum amount varies from bank to bank.

Maximum amount

No Maximum limit

Maturity Period

12 months to 10 years.

Interest Rate

The Interest Rate varies from bank to bank.

The Interest Rate is as applicable to Term / Fixed deposit accounts in the concerned bank.

Usually deposits for longer periods attract higher interest rates.

The interest is usually compounded at quarterly rests.

Nomination facility



Transferable from one branch of the bank to another.

Tax benefits

Not Available

Interest Taxability

With effect from 1st April 2018 (AY 2019-20) Senior Citizens (i.e. Residents aged 60 years or above) are eligible for exemption of interest income from Bank / Post Office deposits (Saving accounts / Time deposits / RD accounts) upto ₹ 50,000/- under Section 80TTB. (They are, however, not eligible for rebate under section 80TTA.)

Account holder other than Senior Citizens are not eligible for any exemption.

Overdraft / Loan facility

Overdraft/loan facility is available against security of the balance in the account.

Premature payment

Premature payment is allowed subject to penalty of lower interest.

Other features

Disclaimer : This site does not make any claim that the information provided on its pages is correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

Updated : Feb 05, 2019