It is well known that Recurring Deposit (RD) can be invested in monthly installments. But what if you start getting monthly income from RD after a fixed period. Yes, ICICI Bank is providing this facility to customers.
ICICI Bank Monthly Income RD: In today’s era, Recurring Deposit (RD) has emerged as a good saving option. For those who cannot make a fixed deposit (FD) by applying lump sum money, RD option was introduced. It is well known that RD can be invested in monthly installments. But what if you start getting monthly income from RD after a certain period.
Works in two ways
Monthly Income Recurring Deposit Account can be opened in ICICI Bank. This investment option is beneficial for those who want to invest in advance for long-term financial goals. Monthly Income Recurring Deposit is a term deposit with RD features in the investment phase and an annuity fixed deposit in the payout phase.
Who can open
Any Indian citizen can open a monthly income RD account with ICICI Bank in single or joint. You can start investing in it with a minimum of Rs 2000 per month. After that you can deposit in multiples of Rs 100 i.e. multiply. The entire period of the Monthly Income RD is divided into two phases.
What are those two phases
The first is the investment phase and the second is the payout phase, also known as the benefit phase. The investment phase minimum is 24 months and stays in multiply for 3 months. The payout phase is also a minimum of 24 months and it stays in a multiplier of 12 months. One thing to note here is that it cannot be changed after both the investment and payout phase have been fixed and the total deposit period is fixed. The depositor fixes the period.
Details of both the phases
In order to raise funds in the investment phase, the customer will have to put money in ICICI Bank Monthly Income RD regularly. After completion of the phase of investment in the deposit, the entire maturity amount for the RD installments plus interest is put in the annuity fixed deposit for the payout period and the customer receives the monthly payout.
What is the interest rate
ICICI Bank Monthly Income RD gets fixed interest rate during the entire deposit period, ie, the same rate of interest is applicable during both investment phase and payout phase. Even if the interest rate decreases or increases, in both the phases the customer gets the same fixed interest rate. Currently, the interest rates on RD in ICICI Bank vary from 3.50 per cent to 5.50 per cent per annum, depending on the duration. The senior citizen is getting 0.50 percent more interest.
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Remember these conditions
The interest received on the deposit will be subject to tax.
If the monthly installment in the Monthly Income RD does not go till the last working day of the month, then the penalty for delay in installment will be Rs 12 per 1000 rupees.
The customer is not allowed partial withdrawal in any phase in the Monthly Income RD account.
Premature closure is allowed during both investment phase and payout phase but penalty will be payable.
There is also an option to get a lump sum
ICICI Bank also offers another option with a Monthly Income RD account in which the customer can get a lump sum of 30% of the entire maturity amount in the payout phase on completion of the investment phase. The remaining maturity amount is then reinstated to the FD with the monthly payout option for the payout period. During this time the monthly payment is received by the customer in his savings account. An example of this is –
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