Q-1 How to open RD account? Ans- All major private and public banks in India offer Recurring Deposit products for their customers. Also, India Post offers a very popular recurring deposit scheme in the name of Post-office Recurring Deposit scheme. Follow the steps given below to open a recurring deposit account.
  • If you already have an account with the bank that you wish to open a Recurring Deposit with, you can contact the nearest bank branch or the bank’s customer service cell to open a recurring deposit account.
  • If you wish to open a recurring deposit account in a bank with you do not have an account with, you will have to contact the nearest branch and submit an application form. Also, you will have to submit basic KYC documents to open an account.
  • At the time of opening a recurring deposit account, the tenure, as well as the monthly due amount (deposit amount), should be decided. Monthly payments for Recurring Deposits can be done online using ECS, online banking or fund transfer.
Q-2 How to calculate the maturity value of an RD? Ans- Most banks that offer Recurring Deposit usually compound interest on a quarterly basis. Compound interest is interest that is added to the principal amount so that from then on, the interest that has been added also earns interest. The following formula gives you the total amount one will get if compounding is done quarterly: M= R [(1+i) n – 1]           (1+i) -1/3 Where, M = Maturity value R = Monthly installment n = Number of quarters i = Rate of interest/400   You can also use different online RD calculators to calculate the maturity value of your RD more accurately and conveniently. Q-3 What will happen if I withdraw the deposited amount before its maturity? Ans- In case of premature withdrawal, the rate of interest that you will receive shall be the one applicable to the period for which the deposit has remained with the bank, with a one percent penalty for such withdrawal. In RD, premature withdrawal is possible however the interest rate offered would be less as compared to the normal base rate. However, some banks would deduct interest rate by 1% to 2% for the period during which the deposit remained in the bank. Usually, the minimum lock-in period for an RD account is 3 months and if a premature withdrawal is made before this period, the account holder would earn zero interest and only the principal amount that was deposited would be refunded to him/her by the bank. In addition to the penalty on interest, incentives offered on the RD are also canceled. Q-4 Is partial withdrawal of RD allowed by the banks? Ans-  Usually, partial withdrawal of RD is not allowed by banks. While most banks do not allow partial withdrawal, other banks offer an alternative in the form of Loan or Overdraft facility which is made available by pledging the balance in RD account as collateral. However, you can do so if you have a Recurring Deposit with a post office for at least a year. In fact, the withdrawn amount is considered a loan, which you can repay as a lump sum. Q-5 Are loans available against RD? Ans- A loan or an overdraft, can be availed against the recurring deposit. An individual can avail a loan of up to 75 to 90% of the deposit amount, depending on the bank’s terms and conditions. This is a fruitful option, especially in case of emergency, as interest keeps getting credited and the loan is available at a lower interest rate, as compared to a personal loan. Q-6 Is nomination facility available with RD? Ans- Yes, Recurring Deposit also comes with a nomination facility. Whether held singly or jointly, there can be only one Nominee for a deposit account. Account holders can change the nominee of the recurring deposit account and also make other changes by making a declaration which is effective in the appropriate form. A minor can be made a nominee of a recurring deposit account with a proper guardian cited to supervise. Q-7 Is TDS applicable on RD? Ans- Yes, TDS is applicable for recurring deposits on the interest earned. The tax is paid according to the tax slab of the account holder. The TDS is effective from June 01, 2015. For instance, if the RD is for ₹10,000, then 10% is deducted as TDS by the bank. Individuals whose income doesn’t fall under the taxable slab are required to submit Form 15G to avoid TDS being deducted from their recurring deposit accounts. Q-8 Can NRIs invest in RDs? Ans- One of the best investment options for NRIs/NREs is a recurring deposit account. Huge savings can be made using small monthly investments. NRIs can either invest in either NRO or NRE Recurring Deposit accounts.
  • NRE RD Accounts: In this savings option, the investments towards deposit installments are credited from the NRE accounts. An NRE is a non-resident external account, where the accrued is exempted from taxes in India. This account can also be moved back to the investor’s home country, without any hassle.
  • NRO RD Accounts: For these accounts, the investments towards the deposit installments can come either from NRE or NRO accounts. NRO is non-resident ordinary accounts. The interest from NRO RDs is taxable at a rate of 30%, plus the additional cess. This is repatriable, subject to certainly featured requisites.
Q-9 Do Senior citizens receive extra benefits on their Recurring Deposits? Ans- Yes, Senior citizens do receive extra benefits on their Recurring Deposits. The interest rates for senior citizens deposits are higher than the regular account. For this, the minimum amount and tenure are fixed by the bank. The interest on RD is compounded on a quarterly basis. Most banks offer senior citizens an additional interest rate of 0.25% to 0.75%, as compared to regular recurring deposits. Q-10  What happens if I don’t pay an installment? Ans- If frequent defaults (non-payments) are observed in your payment of monthly installments, and six installments fall in arrears, the Bank reserves the right to close your RD account. The interest rate applicable to such accounts will be as per the premature withdrawal policy of the Bank. Q-11 Can I pay more than one installment at a time? Ans- You can, but note that there will be no interest paid on any additional amount deposited, other than the installment due. Q-12 What is better- RD or SIP? Ans- A brief comparison between SIP and RD is as under:-
Factors Recurring Deposit (RD) Systematic Investment Plan (SIP)
Investment Scheme In an RD scheme, you will have to invest in a deposit plan that will give you a fixed rate of returns. You can also opt for flexible recurring deposit scheme if you are looking for more flexibility. In a SIP of mutual funds, you can choose between debt or equity type of funds depending on your risk capability.
Risk Factor Recurring Deposits are not prone to risks and are one of the safest forms of investment. Returns that you can expect from the SIP are variable. There can be a risk of capital and returns depending on the stock market. But, recent data shows us the SIP gives good returns if held for a long period of time.
Investment Type In a Recurring deposit scheme, the investor has to deposit a fixed amount every month. Systematic Investment Plan is a way to put your money on mutual funds. Investment can be done on a periodic basis – daily, weekly, monthly or quarterly.
Returns As the rate of interest is fixed in a recurring deposit scheme, the return is also fixed and known at the time of investment. The returns from a SIP for mutual funds is dependent on debt and equity markets and is also based on the fund scheme chosen by the investor.
Liquidity Recurring Deposit is liquid but premature withdrawal or closure will attract penalty charges. In terms of liquidity, a SIP is better when compared to RD. SIP can be closed and the money can be withdrawn without any penal charges.
Taxation Recurring Deposit amount or the interest earned on it are not exempted from tax. SIP investments and returns are exempted from tax only when invested in Equity Linked Savings Scheme (ELSS) funds.
Instalment Frequency Recurring Deposit usually comes with monthly installments SIPs offer flexible installment plans of daily, weekly, monthly, quarterly etc.
Investment Goal Recurring Deposits usually serve short-term savings goal and do not help in long-term wealth growth. SIPs can help in all kinds of investments goals, whether short- or long –term, depending on the frequency of investment, funds chosen and other factors.
  1. How can I prematurely liquidate my recurring deposit online?
Ans-  Following are the steps for liquidating your Recurring Deposit online:
  • Login to Net Banking with your Customer ID and IPIN (Net Banking Password)
  • Select ” Liquidate RD ” option under the Recurring Deposit menu from the Menu bar located under Accounts tab.
  • Select the Recurring Deposit account number from the Drop-down lists, and click on Continue.
  • Verify the details and Confirm the Liquidation.
  • A Confirmation page will be displayed, confirming that your Recurring Deposit has been liquidated.

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CMT Level 1 Study Material

As a matter of fact you can watch live market trading that helps you to connect with CMT. Join a Technical Analysis Course which works on real time markets by using tools & techniques . That’ll give you behavioural understanding of real time Share market. Understanding the money management by real time trading or investment activity. As we know CMT is an MCQ Exam & ask question on application level. Create short notes of Course Content. Get PPT based Short Notes & note interpretation of tools & Techniques on technical analysis. Short Notes help you out to quick revision at the CMT exam time. CMT Books have very complicated language & course content is not properly aligned as it takes topics from various books of different writers. 

So we have to take individual topics and understand concepts in simple, Concise and Clear manner. Take content from various books or websites like Investopedia or Stock Charts on Each Topic for in-depth understanding. Apply tools & techniques with the help of Technical analysis or trading software’s. Read Books twice as MCQ can be created from a single line. while study mark important topics.