A bank account that requires a depositor to deposit a fixed amount (in multiples of Rs 5 or Rs 10) every month is known as a recurring deposit account. This deposit is typically available for a period of 1 to 5 years. The interest rate offered by banks for this account is determined based on the duration, and is generally higher than a regular savings account due to its similarity to a Fixed Deposit Account. This type of account is introduced by banks to encourage the habit of saving among individuals, by providing attractive interest rates.
