In this article we will provide full information about how does a flexible Recurring Deposit work? If you’re looking for a reliable way to save your money, investing in fixed deposits (FDs) or flexible recurring deposits (RDs) could be a great option. Both of these investments provide a fixed interest rate and have a term duration.

However, RDs have a slightly different structure. With RDs, you must deposit a fixed amount every month before a certain date, making it an obligation, even if you may need the money for something else.

But what if you want to save through an RD, but don’t have a consistent income each month? This is where Flexi RD comes into play. Flexi RDs work just like regular RDs, but give you the freedom to choose when and how much to invest.

This way, it’s just like a piggy bank where you can deposit your money as and when you have it. In this blog, we’ll explore how Flexi RDs work and whether they are the right investment option for you.


A Flexible Recurring Deposit is a type of savings scheme offered by banks and financial institutions that allows customers to deposit a fixed amount of money at regular intervals (usually monthly) for a specified period of time.

Unlike traditional recurring deposits, which require customers to deposit a fixed amount at fixed intervals, a flexible recurring deposit provides customers with the flexibility to deposit varying amounts each month within a certain range, or even skip deposits altogether in some cases.

With a flexible recurring deposit, customers can choose the frequency and amount of their deposits based on their financial goals and cash flow, which can help them save regularly without feeling financially burdened.

For example, if an account holder expects to have a higher income in the future, they can increase their deposit amount to save more money. Alternatively, if they are facing financial constraints, they can reduce their deposit amount or skip a month’s deposit without incurring any penalties.

The interest rates offered on flexible recurring deposits are typically higher than those on traditional savings accounts, and the longer the deposit period, the higher the interest rate.

Flexible recurring deposits can be a useful savings tool for individuals who want to save for a specific goal, such as a down payment on a house or a child’s education, but may not have a fixed amount of money to set aside each month.

However, it’s important to carefully review the terms and conditions of a flexible recurring deposit before opening one, as there may be penalties for early withdrawals or missed deposits.


A flexible recurring deposit (RD) consists of two main components: the core amount and the flexible amount. The core amount is the mandatory deposit that you need to make when opening a Flexi RD.

The exact amount of the core deposit may differ from bank to bank, but the majority of banks in India require a minimum of Rs 500 as the core deposit.

On the other hand, the flexible amount is the portion of the deposit that you can invest at your convenience. You can add this amount whenever you have extra funds available, subject to certain constraints.

There is a cap on the maximum amount that you can invest, and the increment amount must be in multiples specified by the bank.

The interest on the flexible amount is earned quarterly and is determined annually. You have the flexibility to invest the money at any point within the month, without incurring any penalty.

Overall, a flexible RD offers a great way to save and earn interest while giving you the flexibility to invest additional funds at your convenience.

It is an excellent option for people who wish to build a disciplined savings habit while also having the freedom to invest additional funds whenever possible.


  • Most banks offer flexible deposit amounts, while some may have a minimum and maximum deposit limit.
  • Late deposits and pre-closure of the Flexi RD typically do not incur penalties, but it’s important to confirm with the bank as some may charge pre-closure fees.
  • Some banks allow customers to take out a loan against their Flexi RD, with the loan amount varying depending on the bank.
  • Some banks offer up to 90% of the available balance as a loan.
  • The tenure for a Flexi RD usually ranges from 6 months to 10 years, with many banks offering this investment option.
  • Some banks allow minors to open a Flexi RD with the supervision of a parent or guardian.
  • Senior citizens can invest in a Flexi RD and may receive higher interest rates compared to regular investors.
  • It’s essential to understand the process of how to claim fixed deposit after death how to claim fixed deposit after death.


Video credit : Bank Mate


If you’re considering opening a Flexi Recurring Deposit (RD) account or want to learn more about its features, here are some frequently asked questions and answers to help clarify the key aspects of Flexi RD accounts.

Q: What is the significant difference between a regular RD account and a Flexi RD account?

In a regular RD account, you are required to deposit a fixed installment on a predetermined date throughout the selected investment tenure. This fixed instalment amount remains constant.

However, a Flexi RD account offers greater flexibility in terms of both installment amount and frequency. While some banks may require you to deposit a core amount on a predetermined date in the Flexi RD account, others provide flexibility in choosing the deposit frequency and amounts.

Q: What is the rate of interest for a Flexi RD scheme?

The rate of interest for a Flexi RD scheme can vary from one bank to another. It is also influenced by factors such as the core amount deposited and the chosen tenure.

Additionally, the rate of interest on any additional installments you make can depend on the date of deposit. Generally, senior citizens may receive a higher interest rate on their Flexi RD accounts.

Q: Is the nomination facility available while opening a Flexi RD account? Can I change the nominee afterwards?

Yes, most banks that offer Flexi RD accounts provide a nomination facility during the account opening process. Furthermore, you can usually change the nominee at a later date if needed.

The process for changing the nominee may vary from one bank to another. Some banks offer online nomination changes, while others may require a visit to the branch to complete the process.

Q: Is an autorenewal facility available for Flexi RD accounts?

Yes, many banks offer an autorenewal facility for Flexi RD accounts. This means that when your Flexi RD account matures, the bank will automatically renew it for the same duration unless you instruct them otherwise. This feature ensures your savings continue to grow without interruption.

Q: Do I need to pay a penalty for skipping an installment in my Flexi RD account?

Whether or not you need to pay a penalty for missing an installment in your Flexi RD account can vary depending on the bank and its specific terms and conditions.

It’s essential to review the terms and conditions of your Flexi RD account with your bank to understand any penalties associated with skipped installments.

As an example, ICICI Bank typically does not charge a penalty for missing an installment in their Flexi RD accounts. However, SBI (State Bank of India) may impose a penalty of Rs. 50 per financial year for skipped installments.

Understanding the details of your flexible recurring deposit, including its flexibility, interest rates, nomination procedures, autorenewal options, and penalties, can help you make informed decisions about your savings and financial goals.

If you have specific questions about a particular bank’s Flexible recurring deposit offering, it’s advisable to contact that bank directly for precise and Up To Date information.


The flexible recurring deposit is a great investment for those seeking to save money over time and earn interest on their investments. It offers improved flexibility in repayment compared to traditional fixed deposits, as well as higher returns than other savings options. To get started with a flexible recurring deposit, it’s important to research different financial institutions to find the one that best suits your needs.



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