Plan your investment
What Our Plans Cover
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Fixed monthly instalments at a loc...
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Tenures from six months to ten yea...
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Auto-debit from a linked account
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Nomination facility
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Loan against the accumulated balan...
Who Can Consider This Plan?
- Indian resident individual, HUF, trust, firm or company
- NRIs, through NRE, NRO or FCNR deposits
- Minors, through a guardian
- PAN, required to avoid a higher rate of tax deduction at source
- Completed KYC with the institution
What May Not Be Covered?
- Any tax exemption — interest is fully taxable
- Variation in the monthly amount once set
- Benefit if rates rise, since the rate is locked at opening
- The full rate on premature closure
- Protection against inflation
Always check the policy wording before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading investments companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced investments professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
A recurring deposit accepts a fixed monthly amount for a fixed tenure at a rate locked at the outset. Each instalment earns interest from the date it is paid, and principal and interest are returned together at maturity.
It is the deposit equivalent of an SIP, and it does the same behavioural job: automating a saving habit so it does not depend on discipline each month. For a saver building towards a dated goal without market risk, it is exactly the right instrument.
The rate is fixed at opening for the whole tenure, which is an advantage when rates fall and a disadvantage when they rise. Unlike an SIP, there is no averaging — you are locked into one rate for every instalment.
Who should consider it
Savers building towards a dated goal within a few years without market risk. First-time savers establishing a habit. Anyone saving for a predictable annual expense — school fees, insurance premiums, festival spending.
Benefits
- Builds a saving habit through automation
- The rate is locked at opening for the whole tenure
- Starts from very small monthly amounts
- No market risk — the maturity amount is contractual
- DICGC insurance to ₹5 lakh per depositor per bank
- Senior citizens receive the additional rate
What is included, and what is not
Read the right-hand column first. It is the one that tends to surprise people later.
Included
- Fixed monthly instalments at a locked rate
- Tenures from six months to ten years
- Auto-debit from a linked account
- Nomination facility
- Loan against the accumulated balance at most banks
Not included
- Any tax exemption — interest is fully taxable
- Variation in the monthly amount once set
- Benefit if rates rise, since the rate is locked at opening
- The full rate on premature closure
- Protection against inflation
Terms vary between providers and between plans from the same provider. The offer document you receive is what governs — we will walk you through it before you commit.
How it works with us
- 1 We work out what the deposit is actually for An emergency fund, a dated obligation, or long-term savings. Only the first two are really jobs for a deposit.
- 2 Rates compared across banks, small finance banks and corporates The spread is wider than most savers realise, and so is the difference in safety. We show both sides.
- 3 Tenure and payout structured around your tax position Cumulative or non-cumulative changes when the tax falls due. For some savers that matters more than the rate.
- 4 Opened, with nomination and Form 15G/H handled The two administrative steps savers skip and later regret. We complete both at opening.
- 5 Maturity tracked, and reinvestment decided deliberately Auto-renewal at whatever rate happens to prevail is a decision by default. We flag maturities so it is a decision by choice.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- The rate is locked for every instalment, unlike an SIP where each purchase happens at the prevailing level. In a rising rate environment that works against you.
- Missed instalments attract a penalty and, if repeated, can lead to premature closure. Set the amount at a level you can sustain through a difficult month.
- Interest is fully taxable and TDS applies above the threshold. Compare the after-tax return against the goal you are saving for.
- For horizons beyond five years, compare against an SIP into a debt or hybrid fund. The deposit gives certainty; the fund has historically given more, with risk.
- For a predictable annual expense, an RD timed to mature just before it is due is a genuinely useful structure.
Documents required
- PAN card
- Identity proof — Aadhaar, passport or voter ID
- Address proof
- Recent passport-size photograph
- Existing bank account details, where opening with your own bank
- Form 15G or 15H, where applicable, to avoid tax deduction at source
- Nomination form
Frequently Asked Questions
How is this different from an SIP?
An RD is a deposit with a rate locked at opening and a contractual maturity amount. An SIP buys market-linked units at whatever price prevails each month, with no guaranteed outcome. The RD gives certainty; the SIP gives market participation and averaging.
What if I miss a monthly instalment?
Most banks levy a penalty, and repeated defaults can result in premature closure of the deposit. Set the instalment at a level you can sustain through a difficult month rather than at your best-month capacity.
Is the interest taxable?
Yes, fully, at your slab rate, with tax deducted at source above the threshold. Compare the after-tax return against your goal — for a taxpayer in a higher bracket it is considerably below the headline rate.
Can I change the monthly amount?
Generally not once the deposit is opened. If you want to save more, most banks allow you to open a second recurring deposit alongside rather than modifying the first.
Is an RD good for long-term goals?
It is good for certainty and modest for growth. Over horizons beyond five years, after-tax deposit returns often sit close to inflation. For long-dated goals, comparing against a systematic investment in a debt or hybrid fund is worthwhile — with the understanding that those carry market risk.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.