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While Fixed Deposits dominate the conversation around bank deposit distribution, Recurring Deposits (RDs) represent an equally compelling — and largely untapped — opportunity for fintech platforms.
India's savings culture runs deep. But not everyone has Rs 50,000 or Rs 1 lakh to lock away in a lump sum. Many savers — especially younger, salaried professionals — prefer to save systematically: a fixed amount every month, building towards a goal.
That's exactly what RDs are designed for. And digital platforms are uniquely positioned to make RDs frictionless.
At a conceptual level, an RD is simple: deposit a fixed amount monthly for a set tenure, earn compound interest, receive a lump sum at maturity. But the technical implementation is meaningfully different from FDs.
| Dimension | Fixed Deposit | Recurring Deposit | |-----------|--------------|-------------------| | Deposit type | One-time lump sum | Monthly installments | | Payment | Single payment at booking | Recurring payments (12-60 times) | | Payment method | UPI, Net Banking, NEFT | UPI Autopay mandate, auto-debit, manual | | Missed payment handling | N/A | Penalty calculation, grace period, default | | Tenure | 7 days to 10 years | Typically 6 months to 10 years | | Interest calculation | On full principal from day 1 | On each installment from its deposit date | | Maturity amount | Predictable from day 1 | Depends on actual deposits made | | Premature withdrawal | Full amount at penalty | Partial/full at penalty |
The core complexity with RDs is the recurring payment. An FD is a single transaction. An RD is 12-60 transactions that must happen reliably, on time, every month.
For automatic monthly debits, you need a UPI Autopay mandate or e-NACH mandate registered against the user's bank account. This involves:
UPI Autopay (introduced under NPCI guidelines) has simplified this significantly, but implementation still requires integration with payment gateways that support mandate registration.
Life happens. Users miss installments — insufficient balance, mandate rejection, bank downtime. Each missed installment triggers:
Your infrastructure needs to track installment status, calculate penalties, notify users before due dates, retry failed debits, and handle the edge cases when defaults occur.
RD interest is calculated on each installment separately from its deposit date. This means:
The maturity formula for RDs uses a series calculation, not a simple compound interest formula. And if installments are missed, the calculation changes — requiring a per-installment interest computation.
Just like FDs, each bank has its own RD configuration:
A 25-year-old earning Rs 40,000/month doesn't have Rs 5 lakh for an FD. But they can commit Rs 5,000/month to an RD. Over 2 years at 8%, that's Rs 1,30,000+ in savings with Rs 10,000+ in interest.
Digital platforms targeting young, mobile-first users are perfectly positioned to offer this.
"Save Rs 10,000 from every salary" — auto-deducted on payday via UPI Autopay. This is the digital equivalent of the post-office RD that an earlier generation used, but with better rates, better UX, and no branch visits.
Neobanks and salary management apps can embed this as a core savings feature.
"Save for a vacation in 12 months." "Build an emergency fund over 2 years." "Save for a wedding in 3 years." Goal-based framing transforms an RD from a banking product into a personal finance tool.
The fintech adds the goal UI and motivation layer. The RD infrastructure handles the actual savings execution.
Longer-tenure RDs (3-5 years) positioned as education savings or retirement top-ups appeal to parents and mid-career professionals. The systematic nature of RDs makes them ideal for long-horizon goals.
If building FD infrastructure is a 6-18 month project, RDs add another layer of complexity:
| Additional RD Complexity | Engineering Effort | |--------------------------|-------------------| | Mandate registration (UPI Autopay / eNACH) | 2-3 months | | Installment tracking and status management | 1-2 months | | Missed installment handling and penalty calculation | 1-2 months | | Per-installment interest computation | 1 month | | Notification system (pre-due, post-miss, maturity) | 1-2 months | | Bank-specific RD rule engine | 1-2 months |
That's 6-12 additional months of engineering on top of FD infrastructure — assuming you've already solved the KYC, payment, and bank integration challenges.
The same infrastructure platform that handles FD distribution can extend to RDs with the same integration:
For fintech platforms already offering FDs through a white-label infrastructure, adding RDs becomes a configuration change — not a new integration project.
RDs are underserved digitally. Most RD bookings still happen at bank branches. Yet the product fundamentally appeals to the digital-first saver: systematic, automated, goal-oriented.
The fintech that makes RD booking as easy as setting up a SIP (Systematic Investment Plan) in mutual funds will capture a significant share of India's systematic savings market.
Consider:
For fintechs evaluating RD offerings, the checklist is:
The infrastructure exists. The market demand is clear. RDs are the next logical product for any fintech that's already serving savers.
Blostem's infrastructure extends beyond FDs to Recurring Deposits — same SDK, same white-label depth. Explore our products.
Get in touch with our team to discuss how Blostem can power your platform.
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