The interest rate offered by banks on RDs depend on factors like which category you fall under and the tenure you choose. Most banks offer senior citizens a higher rate of interest when compared to regular citizens. A variety of RD schemes are made available to you by banks. In addition to the regular schemes, special schemes are also offered to help you achieve the goals. The interest rates offered by banks on RD range between 3.50% to 8.40% p.a. for the general public. Senior citizens are offered an additional rate of interest by banks for opening an RD account.
|Bank||RD Interest Rates
|Senior Citizen RD Rates|
|HDFC Bank||5.65% - 7.10% p.a.||6.15% - 7.60% p.a.|
|ICICI Bank||5.75% - 7.10% p.a.||6.25% - 7.60% p.a.|
|State Bank of India||4.50% - 6.50% p.a.||5.00% - 7.00% p.a.|
|Allahabad Bank||5.00% - 6.75% p.a.||5.00% - 6.75% p.a.|
|Andhra Bank||3.50% - 6.60% p.a.||4.00% - 7.10% p.a.|
|Axis Bank||3.50% - 7.10% p.a.||3.50% - 7.75% p.a.|
|Bandhan Bank||3.50% - 7.65% p.a.||4.25% - 8.40% p.a.|
|Bank of Baroda||4.50% - 6.60% p.a.||5.00% - 7.10% p.a.|
|Bank of India||6.75% - 7.00% p.a.||7.25% - 7.50% p.a.|
|Bank of Maharashtra||4.25% - 6.00% p.a.||4.75% - 6.50% p.a.|
|Canara Bank||5.00% - 6.25% p.a.||5.50% - 6.75% p.a.|
|Central Bank of India||4.50% - 6.25% p.a.||5.00% - 6.75% p.a.|
|CitiBank||5.25% - 5.50% p.a.||3.50% - 6.00% p.a.|
|City Union Bank||6.00% - 6.75% p.a.||6.25% - 7.25% p.a.|
|Corporation Bank||5.00% - 6.90% p.a.||5.50% - 7.40% p.a.|
|DBS Bank||4.00% - 6.50% p.a.||4.50% - 7.00% p.a.|
|Deutsche Bank||6.25% - 7.75% p.a.||6.25% - 7.75% p.a.|
|Dhanalakshmi Bank||4.00% - 6.90% p.a.||4.50% - 7.40% p.a.|
|Federal Bank||3.50% - 7.25% p.a.||4.00% - 7.75% p.a.|
|IDBI Bank||3.50% - 6.95% p.a.||4.00% - 7.45% p.a.|
|Indian Bank||4.50% - 6.60% p.a.||5.00% - 7.10% p.a.|
|Indian Overseas Bank||5.75% - 6.80% p.a.||6.25% - 7.30% p.a.|
|IndusInd Bank||3.75% - 7.50% p.a.||4.25% - 8.00% p.a.|
|Jammu and Kashmir Bank||4.75% - 6.75% p.a.||5.25% - 7.25% p.a.|
|Karnataka Bank||3.50% - 6.80% p.a.||4.00% - 7.30% p.a.|
|Karur Vysya Bank||5.00% - 7.00% p.a.||7.00% - 7.50% p.a.|
|Kotak Mahindra Bank||6.25% - 6.70% p.a.||6.75% - 7.25% p.a.|
|Lakshmi Vilas Bank||4.50% - 7.60% p.a.||4.50% - 8.20% p.a.|
|Oriental Bank of Commerce||5.40% - 6.80% p.a.||5.40% - 6.80% p.a.|
|Post Office RD Rates||7.20% p.a.||7.20% p.a.|
|Punjab and Sind Bank||6.40% - 7% p.a.||6.90% - 7.50% p.a.|
|Punjab National Bank||4.50% - 6.60% p.a.||5.00% - 7.10% p.a.|
|Saraswat Bank||6.50% - 7.60% p.a.||6.50% - 7.85% p.a.|
|South Indian Bank||6.50% -7.45% p.a.||7% - 7.95% p.a.|
|Syndicate Bank||6.35% - 7.15% p.a.||6.85% - 7.65% p.a.|
|Tamilnad Mercantile Bank||6.75% - 7.25% p.a.||6.75% - 7.50% p.a.|
|UCO Bank||4.50% - 6.50% p.a.||5.00% - 7.00% p.a.|
|Union Bank of India||5.00% - 6.75% p.a.||5.50% - 7.25% p.a.|
|United Bank of India||5% - 6.25% p.a.||5.50% - 6.25% p.a.|
|Yes Bank||6.85% - 7.75% p.a.||7.35% - 8.25% p.a.|
Note : The rates mentioned above are as of 15 Dec 2019.
Regular Savings Scheme - Banks offer recurring deposits to Indian citizens above the age of 18 years. Customers can choose to deposit a fixed sum of money for a period of time, usually between 6 months to 10 years. Interest can be computed on simple or compound basis. At the end of the tenure, the lump sum amount can be withdrawn. Some schemes allow you to reinvest the money. You can open a recurring deposit for as little as Rs. 10 per month. The interest rates on the regular recurring deposits range between 7% to 8% per annum.
Junior RD Schemes - Bank’s also offer recurring deposit schemes for kids. Parents or guardians can open these deposits for their children to start saving for their future, education and other needs. Students can also avail of these deposit schemes. Learning to handle finances and the importance of saving at a young age will help inculcate a smart sense of money. The interest earned on these deposits will either be equivalent to the regular RD schemes or be higher to encourage saving amongst the youngsters.
Senior Citizens RD Schemes - Banks offer higher rates of interest for senior citizens. Usually, 0.50% per annum is given over and above the prevailing interest rate. The interest rates range between 7.5% to 9.25% per annum. There are also schemes available that are designed to help senior citizens during their retirement and old age.
NRE/NRO RD schemes - NRE and NRO recurring deposit accounts may be offered a lower interest rate. Furthermore, senior citizens who hold NRE/NRO accounts will not be offered the additional interest rate. These accounts attract around 7.50% interest per annum.
Special RD Schemes - Banks offer different schemes designed to suit the needs and capabilities of a variety of people. These schemes generally carry a higher rate of interest as your goal is more specific. ICICI Bank offers the iWish deposit which allows you to contribute various amounts of money to your RD account. Furthermore, other people can also contribute to help you reach your goals. There are RD schemes with free life insurance available. With certain schemes, you are allowed to withdraw the money in part without breaking the full deposit. Other schemes reward you with a bigger lump sum amount which makes it a worthwhile investment.
Type of account - The account you hold will make a difference in the eligible interest rates. Regular savings accounts usually get higher interest than the NRE/NRO accounts. Some banks offer the same interest rates to both account holders.
Tenure - The tenure of your deposit is one of the most important factors in determining the RD interest rate. Medium term deposits generally earn a much higher interest rate. Some banks offer the highest rate on long-term deposits of 10 years. But this is not always the case as some banks also offer the same interest rate on a 1-year deposit as well as a 10-year deposit.
Age - Almost all banks offer a higher rate of interest to senior citizens. This rate is usually 0.5% per annum higher than the regular interest rates. Junior accounts can also stand to earn a higher interest rate. This depends on the bank’s offer on minor accounts.
Choice of bank - Interest rates vary quite a bit between different banks. Currently, the top banks offer recurring deposits starting at 7% per annum interest. Nationalised banks tend to offer a higher interest rate of up to 8% per annum.
Schemes on offer - Banks also have different recurring deposit schemes running. Corporation Bank has a Millionaire Scheme on offer wherein you will receive a million rupees at the end of the scheme. This deposit carries a very high interest rate of 9.25% per annum. So the choice of your deposit scheme will also factor into the interest rate. Depending on the benefits offered with the RD scheme, your interest rate may vary.
Safe investment - Recurring deposits carry no risk or very little at all. Choose a stable and secure bank to ensure that your money is safe. Recurring deposits are just a simple investment of your money and do not dabble in the markets. Therefore the interest rate will not fluctuate and you do not stand to lose any money.
Earn while you save - Your deposit will earn interest from your first contribution. The interest accumulated will increase through your tenure. The longer you invest, the more interest you will earn.
Lump sum payout - At the end of the RD tenure, you will receive a lump sum of cash. This amount includes your contribution plus the interest earned. You can use the money to reinvest it or spend it on what you were saving for.
Online access - Most banks offer Internet Banking services which you can use to open deposits, access your accounts and see the progress of your deposit. You can also view the different interest rates offered. You can pick the tenure and deposit amount suitable to you and also earn the highest interest offered.
Loan offers - When you have an RD with a bank, you sometimes get pre-approved loan offers. In other cases, your loan applications will be given preference and your processing might be faster. In addition to this, banks offer concessional interest rates on loans as well.
Fixed Deposits and Recurring Deposits are among the most popular investment options in India. If you are planning to invest in either of this, you must be aware of the differences between Recurring Deposit and Fixed Deposits. It is very common for the first time investors to get confused between RD and FD. While both Recurring Deposit and fixed deposits are offered by most of the banks in India, each come with their own advantages and disadvantages.
Before investing in a Recurring Deposit or Fixed Deposit scheme, you must be familiar about certain important features of the scheme such as rate of interest and investment limit.
Recurring Deposit is a very popular investment scheme amongst the risk averse Indians mainly because of the good returns and savings benefits that it offers. In a Recurring Deposit scheme, you will have to deposit a fixed amount of money every month for a predefined period of time and the amount will fetch you interest. But, for interest that you earn on Recurring Deposit investment amounts, 10% will be deducted as TDS. Also, the Tax Deducted at Source (TDS) will be 20% if the Pan information is not provided. The Tax Deducted at Source (TDS) varies depending on your annual income, your age and the interest that your accrue on your RD amount.
Almost all banks which operate in the country offer attractive interest rates on RDs. Among all the banks listed above, Lakshmi Vilas bank offers the highest interest on RDs to both general citizens and senior citizens.
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The interest rates of small savings scheme may go up in the next quarter, the finance ministry indicated on Monday. Subhash Chandra Garg, the Economic Affairs Secretary when asked whether the government would be prompted to raise the interest rates of small savings schemes given the rising bond yield stated it was not in the cards for the current quarter. The government had in 2016 linked the small savings deposit rates with the benchmark Government Securities (G-Sec) rate. It needs to be mentioned that the government fixes the interest rates of small savings schemes like PPF, NSC, Sukanya Samriddhi Scheme and senior citizen savings scheme for every quarter. For the ongoing quarter, the interest rates for small savings schemes were reduced by 0.2 percent points. Following the cut in the rates, PPF and NSC fetched an annual rate of 7.6 percent, KVP provided a yield of 7.3 percent while Sukanya Samriddhi offered 8.1 percent. As for term deposits in the range of 1-5 years interest rate paid quarterly was in the range of 6.6 percent to 7.4 percent while for five-year recurring deposits the interest rates was 6.9 percent.
26 March 2018