What Happens If You Miss an RD Payment?
Recurring Deposits are one of the most common investment mediums with easy and safe deposits where contributions are regularly made towards savings over a fixed period of time with definite returns on the investment. However, discipline and consistency in depositing the instalments of RD are indispensable to successfully enjoy the benefits of this mode of investment.
Recurring Deposit is among the most popular investment schemes in the country due to various reasons. A number of reasons has made an RD one of the top investment options for people, especially for first-time investors because of its safety and guaranteed returns.
Since a Recurring Deposit account does not depend on the market and comes with a fixed return of interest, an RD would be among the ideal investment vehicles to park your money.
What Is an RD Due Date?
In an RD scheme, a customer will have to deposit fixed amounts every month into the account over a predefined period of time. The amount that has to be deposited every month is known as due.
If a person has opted for a RD scheme where he has to deposit Rs.5,000 every month for a period of one year, Rs.5,000 becomes the due amount. The account holder can deposit the due amount every month to the Recurring Deposit account by a variety of means like cash, standing instructions or local cheque. Installments for a month must be credited to the Recurring Deposit Account on or before the last working day of that particular month.
What Happens If You Miss a Monthly RD Due ?
- If, due to various reasons, the Recurring Deposit due for a month is not credited or paid, your bank may charge a penalty. However, this varies from one bank to another and it is advised to read the terms and conditions for the RD scheme to know the penalty for non-payment of monthly due.
- If the account holder does not pay the deposit amount for consecutive months, his RD account will be permanently deactivated or closed until he pays the outstanding amount. This time period varies from 3 months to 5 months depending on the bank.
- However, if your Recurring Deposit scheme is flexible, you can choose not to pay the deposit amount for a month and you will not be charged any penalty.
How to Avoid the Penalty for Non-Payment of Recurring Deposit Due?
- There are several ways by which you can avoid the non-payment of your Recurring Deposit due. One of the ways would be to set up a standing instruction facility where the amount will be automatically debited from your account and transferred to Recurring Deposit account.
- In case you don't have sufficient funds to pay for your Recurring Deposit Due every month, it is advised to save money till you pay or lower the RD deposit amount for good.
- You can also opt for a flexible Recurring Deposit scheme where you will not be penalized if you do not pay the due for a month or two.
RD Article Pages
- Recurring Deposit Vs. Chit Fund
- Miss to Pay the Recurring Deposit Due
- Difference Between Recurring Deposit and SIP
- Open RD Account through HDFC NetBanking
- RD Account in SBI
- Advantages of Recurring Deposit
- Flexi RD
- SBI Flexi RD Schemes
- Monthly Recurring Deposit
- Co-operative Bank Recurring Deposit
- City Union Bank Recurring Deposit
- Indian Bank Recurring Deposit
- Union Bank Recurring Deposit
- UCO Bank Recurring Deposit
FAQs“FAQs: What Happens If You Miss RD Payments?
- When opening an RD account, Can I decide the amount which will be deposited in the account?
Yes, you can decide the amount which needs to be deposited in the account on the due date.
- How much do I need to pay as penalty for missing a RD instalment?
The penalty varies from bank to bank. You need to check with the bank where you have opened the recurring deposit account.
- Can I make the payment of the RD instalment using a cheque?
Yes, the payment of the RD instalment can be made with the help of a cheque.
- Do I need to pay a penalty if there is a delay in the payment of RD instalment?
Yes, if you miss paying the RD installment on the due date, the bank will charge you a penalty.
- If I miss paying the instalments for three consecutive months, will the RD account be closed?
In case, you miss paying the instalments for three consecutive months, the RD account will be deactivated or closed by the lender. However, the time period varies from bank to bank so check about it with the bank or financial institutions at the time of opening the bank.
Annie Jangam is a financial writer with a unique background in biotechnology and eight years of genomics research experience, culminating in 6 international publications. Her three-year experience in SEO-based content writing spans diverse topics. She combines her analytical skills with a talent for clear communication to simplify complex financial concepts. She delivers informative, engaging content with scientific precision and creative flair in the fintech industry. She covers various financial products such as banking, insurance, credit cards, tax, commodities, and more. Her research background demonstrates her dedication, attention to detail, and problem-solving skills, making her a valuable asset in the data-centric world of fintech. |
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