What is a Flexi Recurring Deposit?

You must have heard of a recurring deposit, but did you know that you can also open a flexi recurring deposit account? Let’s understand what a flexi RD is.

Defining a Flexi RD

A ‘flexi recurring deposit’ is a more convenient savings instrument for people who do not have a similar income every month. There are two sections in a flexi RD -

The core amount is deposited with a tenure in mind. The rate of interest will depend on this tenure, amount, and the bank’s interest rates for flexible recurring deposits. 

The variable amount is deposited every month, adding to the existing core amount in the account.  If the core amount is not deposited within the pre-determined date, a penalty will be charged by the bank.

Features of Flexi Recurring Deposit

After learning what is a flexi recurring deposit, let us look at its features and benefits -

Flexi Recurring Deposit Interest Rates

Flexi RDs are a great investment tool given the liquidity and high returns they offer to customers. However, the tenures, rates of interest, and amounts vary depending on the bank you choose to open a flexi RD account. 

Here are some major banks and the basic features of their flexi RD accounts -

Name of Bank Flexi RD Scheme Rate of Interest Tenure Amount

SBI - e-SBI Flexi Deposit Scheme

As applicable to term deposits

5 - 7 years

Rs.5,000 to Rs.50,000 in a financial year

HDFC Bank - My Passion Fund

4.50% - 7.00%

6 months - 10 years

Rs.1,000 to Rs.14,99,900 per month

ICICI Bank - iWish flexible Recurring Deposit

3.50% - 5.35%

Any

Any

Central Bank of India - CENT Swa-Shakti Flexi Recurring Deposit Schemes

3.50% - 6.40%

6 months - 120 months

Rs.100 - Rs.1 Lakh

Bank of Baroda - Yatha Shakti Jama Yojana

As per the maturity period of the deposit

12 months - 120 months

Rs.100 - Rs.10,000 per month

Note: Rates mentioned as of 11th March 2024, and can be revised by the bank without any notice. Please check with the bank before opening an account.

Flexi RD vs Regular RD

Both flexi RDs and regular recurring deposits are great investment tools for the flexibility they offer. But here are some differences between flexible recurring deposits and regular recurring deposits -

Conclusion

A flexi recurring deposit has many benefits over a regular RD. If you are an entrepreneur and have some extra funds during a particular month, a flexi RD gives you the freedom to invest it in the same RD that you have been maintaining.

However, you need to remember that in most cases, the promised rate of interest will be calculated on the base or core amount that you pay while opening the account. This is the amount you pay every month on a stipulated date. 

The interest on any extra variable amount that your deposit will be calculated from the day it was deposited. Thus, this comes with the possibility of investing the amount at any time of the month. 

The terms and conditions of flexi recurring deposits will vary depending on the bank that you choose. 

What is a Flexi Recurring Deposit? - Related FAQs

Whether the regular RD or a flexi RD is better for you will depend on your preference, income, and saving style. A flexi RD does give you more flexibility in terms of the amount you can invest, as compared to a regular RD.

No, you cannot partially withdraw funds from a flexi recurring deposit. You can either close the whole RD or look for loan options on the RD funds.

Yes, you can skip an RD installment. Depending on the rules of your bank, you might have to pay a penalty for one missed payment. If you miss more consecutive payments, your RD account might be closed by the bank.

The minimum deposit for SBI Flexi is Rs.5,000 per financial year.

You can earn an interest between 3.50% - 5.35% on your ICICI Bank flexible RD. The iWish flexible recurring deposit gives many benefits including no cap on tenure or amount.

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