Is it advisable to open a Term Deposit/RD in bank?

[letmein]

I've got some idle funds lying in my bank account, is it advisable to open up a Term Deposit or an Recurring Deposit?

Standard Chartered is offering 8.75% for 181 – 210 days on a reinvestment deposit.
HDFC is giving a rate of 8.25% for 6 months on a RD

I don't want to lock it in for a longer period, as I may need the funds in case of an emergency.

 

[sabby]

If you have an ICICI a/c, check out iWish. Flexible RD with reasonable interest.

 

[mpaspc]

Banks levy Premature withdrawal charges which range from 0.25-1% . Please make sure there is no premature withdrawal charges on the standard chartered deposit , interest rates are fine , max they usually give out is 9 % assuming you are not a senior citizen .

Ps - SC requires a minimum deposit of 50k

 

[red-devil]

I have a RD going with HDFC (I have their salary account, that's why I'm using HDFC and not for any other reason).. IMO, if you have a specific amount that you think can be saved every month, then yes it makes sense to have a RD account. FD is too much money up front for a marginal increase in interest rates.

You may even want to go the "sweep in" route but I'm a little more old school when it comes to managing my money

 

[eternoMind]

This article might help you decide!

Recurring Deposits – How to get maximum benefit from them in your financial life !

 

[int86]

This article might help you decide!

Recurring Deposits – How to get maximum benefit from them in your financial life !

open a flexible recurring deposits. As you earn on monthly basis so the saving in monthly way. And as your don't know how much you will save each month so the flexible method. But beforehand you have to decide the period and the minimum monthly contribution,

 

[int86]

Banks levy Premature withdrawal charges which range from 0.25-1% . Please make sure there is no premature withdrawal charges on the standard chartered deposit , interest rates are fine , max they usually give out is 9 % assuming you are not a senior citizen .

Ps - SC requires a minimum deposit of 50k

No matter what bank you choose, there is 1% premature withdrawal penalty on from rate of interest applicable for duration you kept your money with bank in India. RBI rule.

 

[bssunilreddy]

My wife knows best regarding interest and all other matters.

 

[pr0ing]

@OP,
It is always advisable to open an FD instead of keeping funds idle. Check the interest rate for saving account and that for even a 30 days FD, there will be a big difference. In case of an emergency it will hardly take a day to close the FD and even with the premature withdrawal penalty you'll have earned more than the savings a/c interest.

I would like to know whether there are any other penalties in case of premature withdrawal or doing it multiple times.

 

[icube]

iam using sbi you can create fd or rd online if you cancel fd or rd money credited to savings account instantly the big plus in sbi is minimum amount required for fd is Rs1k only