Many of us do not know, about TDS deduction on fixed deposits. Let me tell you, if your fixed deposit interest exceeds 10,000 INR in a financial year, then 10% TDS will be deducted from your account. This is applicable per customer per branch of the specific bank.
However, if you are operating a recurring deposit account, then no TDS will be deducted from the interest earned by this money.
So, opening a recurring account can help you a lot if you are worried about TDS.
You can open a recurring deposit account online, with the help of Internet banking. The recurring deposit is a monthly scheme so your account will be deducted monthly from the date of opening recurring deposit account.
What is the minimum amount for opening a recurring deposit online?
The minimum account for opening a recurring deposit account online is 500 INR.
Can I redeem the interest monthly from the recurring deposit account?
No, you will get the whole interest amount at once on the maturity date of your recurring deposit account. It will be credited back in your bank account.
What is a range of tenure for the recurring deposit accounts?
A recurring deposit account can be opened for minimum 6 months. The maximum limit for this kind of account is 10 years.
What are the current interest rates for the recurring deposit accounts?
Many banks are offering 7% to 9.50% per annum interest rates for recurring deposits.
Pros of a recurring deposit account:
1. No TDS applicable.
2. You can invest money slowly like EMI.
Cons of a recurring deposit account:
1. Interest will be paid after the maturity of the recurring deposit account.
2. If you failed to deposit your installment on time, then bank will be levied the penalty.
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