Under a Recurring Deposit account (RD account), a specific amount is invested in the bank on a monthly basis for a fixed rate of return. The deposit has a fixed tenure, at the end of which the principal sum as well as the interest earned during that period is returned to the investor. Recurring Bank Account provides the element of compulsion to save at high rates of interest applicable to Term Deposits along with liquidity to access those savings any time. Since a recurring deposit offers a fixed rate of return, it does not provide protection against inflation.

The advantage in opening a Recurring Deposit Account that the Depositor would be able to save certain sums in fixed monthly Installments so that he / she would be able to meet an  anticipated liability / obligation after the end of a specified  period.