Question

What is a recurring deposit account? Explain.

Answer 1

Recurring deposit account:

• A recurring deposit account is opened when one wishes to save some money, deposit it regularly in this account and earn an interest at the end of the account term.
• One needs to compulsorily deposit a predetermined amount every month in this account for a pre-determined period. The bank returns the entire amount along with interest to the account holder at the end of the account term.
• The rate of interest is higher than the savings account and lower or almost near to the interest on fixed deposit accounts.