Saving is likely the most important money routine, as well as being secure long-term and having a clear head. In America, as is well known, most individuals are familiar with traditional savings accounts, certificates of deposit, and investment vehicles like 401(k)s and IRAs; one type of savings vehicle that is less familiar but incredibly beneficial is the periodic deposit account.
Such a savings plan enables you to invest a fixed sum of money at regular periods—ordinarily monthly—over a specified duration and earn interest on your payments. It has the discipline of fixed savings and the benefit of assured interest, so it is a wise investment for individuals who prefer to amass savings steadily and over time.
Let's explore benefits recurring deposit accounts, how they work in the United States, and how to choose the correct account.
A Recurring Deposit account (RD) is a product where you pay a fixed sum at regular intervals to save for the future, typically monthly. Unlike lump sum modes such as CDs, RDs help you accumulate your savings through small, regular payments. Eventually, this regularity yields a significant amount, together with interest earned.
While more common in Singapore and India, American banks and credit unions have since made the same products available under titles like "automatic savings plans," "US bank recurring savings plan," or "goal-based savings accounts."
Though the U.S. economy does not usually refer to using the term "recurring deposit," the practice remains prevalent. It functions just like monthly automatic payments made into a CD or a high-yield savings account for a term.
Even though not all American banks refer to them as recurring deposit accounts, most banks have similar nature savings instruments.
Working with a recurring deposit account has numerous monetary benefits. Some of the main advantages of a recurring deposit account are as follows:
Such advantages make recurring deposits a suitable choice for fixed-income earners, young earners, or goal-specific savings.
Interest rates differ between financial institutions. The top US everyday deposit rates will differ based on factors like the duration of the deposit, the monthly payment size, and the minimum balance.
The following are some broad guidelines to be on the lookout for when looking for U.S. alternatives:
Though banks do not share the same terminology, requesting "automatic savings plans" or "scheduled deposits of fixed terms" will take you to competitive offerings.
They provide some of the best US regular deposit rates in 2025, including online banks such as Ally Bank, Capital One, and Discover, as well as some regional credit unions.
Opening an RD plan is easy in the U.S. due to online banking. This is how you can open a recurring deposit online:
Most of the major banks nowadays offer the facility to open recurring deposit online through web portals or mobile banking apps, making it easy and convenient.
More people are known about the fixed deposits (CDs) than recurring deposits. But if one is to compare the two—FD vs savings account USA and then FD vs recurring deposit—then it becomes clear.
Therefore, if you are not comfortable investing thousands of dollars in one shot, a recurring deposit account provides less stress and a consistent means of increasing wealth.
A US bank recurring savings plan is most appropriate for:
These accounts facilitate sticking to a savings plan without the ease of fast withdrawal like that associated with a typical savings account.
In the US, interest on ordinary deposits is deductible for tax in most cases. Your bank will give you a 1099-INT form if your interest income in a year is more than $10. The interest is included in your income and taxed.
For withdrawals:
Always inquire from your bank regarding terms and rights to save yourself from surprises.
In addition to keeping your savings growing, recurring deposits also create the habit of uninterrupted saving. Psychology is the major determinant of financial success, and automation can help break the habit of putting off saving.
Some tips for maximizing success with recurring deposit accounts are:
This approach makes saving second nature, not a chore.
Although periodic deposits are an excellent start, they can be combined into a bigger savings plan. Some alternatives include:
The systematic deposit account is at the center around which savings are systematic, but there are other instruments too that help to spread your portfolio and finance other financial objectives.
The recurring deposit account is not the number one best-seller nor the most sought-after financial product in the US, but it is a great product for anyone who wants to save safe and sound. Whether you are just starting to save or need to save in order to reach a certain financial target, this bright way helps you save safely and habitually.
From learning about how US recurring deposits function to the US's highest recurring deposit rates, American consumers today have personalized solutions that once were in the domain of special interest. Recurring deposit registration online is making it easier than ever to start and stick to a savings plan.
This content was created by AI