A type of bank account where the customer makes a deposit on a periodical interval up to a certain period of time is known as “Recurring Deposit Account”.  The purpose of this type of account is to encourage thrift and savings habit.  The account is ideal for convenient savings.  It enables to build up a sizeable capital in a regular and systematic way. The features of the Recurring Deposit are as follows:

The deposit is made in as low an amount of Rs. 50 and in multiples of Rs. 50.  There is no ceiling on the maximum amount.  The account offers an attractive rate of interest, the rates being revised from time to time.  The interest is compounded every quarter.  The account commands easily liquidity and can be closed before maturity.  Further, it permits loan against deposit.  Nomination facility is available too.