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Recurring Deposit Interest Rates

The interest rates on RDs depend on which category you fall under and your choice between different banks. Senior citizens earn a higher rate of interest when compared to regular citizens. There are schemes offered to minors, students and parents to save for the children. These schemes may carry higher rates of interest. There are also special schemes devised to help people reach their goals. Your interest rates also depend on the type of account you hold. A regular savings account will generally earn a higher rate of interest than an NRE/NRO account. The current interest rates available from different banks range between 7% and 9.25% per annum.

Fixed Deposit

Recurring Deposit Interest Rates Comparison - March 2017

Bank Name RD Interest Rates Senior Citizen RD Rates

Allahabad Bank RD Rates
6.5% to 6.9% 6.5% to 6.9%

Andhra Bank RD Rates
6.25% to 7% 6.75% to 7.5%

Axis Bank RD Rates
6.75% to 7.1% 7.25% to 7.6%

Bandhan Bank RD Rates
7% to 7.7% 7.5% to 8.2%

Bank of Baroda RD Rates
4.5% to 7% 5% to 7.5%

Bank of India RD Rates
6.50% to 6.90% 6.50% to 6.90%

Bank of Maharashtra RD Rates
6% to 6.25% 6.5% to 6.75%

Bharatiya Mahila Bank RD Rates
6.5% to 7% 7% to 7.5%

Canara Bank RD Rates
6.9% 7.4%

Central Bank of India RD Rates
4% to 6.5% 4.5% to 7%

CitiBank RD Rates
5.25% 5.25%

City Union Bank RD Rates
6.7% to 7.1% 6.95% to 7.5%

Corporation Bank RD Rates
6.5% to 6.9% 7% to 7.4%

DBS Bank RD Rates
5.75% to 6.7% 5.75% to 6.7%

Dena Bank RD Rates
6.5% to 7% 6.5% to 7%

Deutsche Bank RD Rates
6% to 8% 6.5% to 8.25%

Dhanalakshmi Bank RD Rates
6.5% to 6.75% 7% to 7.25%

DHFL Bank RD Rates
7.75% 7.75%

Federal Bank RD Rates
6.5% to 6.8% 7% to 7.3%

HDFC Bank RD Rates
5.75% to 6.9% 6.25% to 7.4%

ICICI Bank RD Rates
5.75% to 6.9% 6.25% to 7.4%

IDBI Bank RD Rates
6% to 6.4% 6.5% to 6.9%

Indian Bank RD Rates
6% to 6.75% 6.5% to 7.25%

Indian Overseas Bank RD Rates
5.75% to 7.25% 6.25% to 7.75%

IndusInd Bank RD Rates
6.75% to 7.15% 7.25% to 7.65%

Jammu and Kashmir Bank RD Rates
6.75% 7.25%

Karnataka Bank RD Rates
6.5% to 7.10% 7% to 7.60%

Karur Vysya Bank RD Rates
7% 7.5%

Kotak Mahindra Bank RD Rates
6% to 6.75% 6.5% to 7.25%

Lakshmi Vilas Bank RD Rates
7% 7%

Nainital Bank RD Rates
7.50% to 7.90% 8.00% to 8.40%

Oriental Bank of Commerce RD Rates
6.5% to 7% 6.5% to 7%

Post Office RD Rates
7.30% 7.30%

Punjab and Sind Bank RD Rates
7% 7.5%

Punjab National Bank RD Rates
6.8% to 7.2% 7.3% to 7.7%

Saraswat Bank RD Rates
7.25% 7.5%

South Indian Bank RD Rates
6% to 6.75% 6.75% to 725%

State Bank of India RD Rates
6.5% to 6.9% 7% to 7.4%

Syndicate Bank RD Rates
6.8% 6.8%

Tamilnad Mercantile Bank RD Rates
5% to 7% 7% to 7.5%

UCO Bank RD Rates
6.75% to 7% 6.75% to 7%

Union Bank of India RD Rates
6.8% to 7% 6.8% to 7%

United Bank of India RD Rates
5.75% to 6.5% 5.75% to 6.75%

Vijaya Bank RD Rates
6.25% to 6.5% 6.75% to 7%

Yes Bank RD Rates
7% to 7.10% 7.50% to 7.6%

Note : Rate range is on the basis of different deposit tenure.

Types of Recurring Deposit Interest Rates

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.

Factors That May Affect Recurring Deposit Interest Rates

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.

Benefits of Recurring Deposit Interest Rates

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.

Recurring Deposit vs Fixed Deposit

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.

Read on to find more about the differences between a Fixed Deposit and a Recurring Deposit investment scheme.

Tax on Recurring Deposit Interest rates

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.

Read on to know more about the TDS for your Recurring Deposit Interest Amount

Which Banks Offer the Highest Recurring Deposit Interest Rates in India?

One of the most preferred investment options in India, Recurring Deposit schemes offer good interest returns with almost no risks involved. In a recurring deposit scheme, the investor will be required to make deposits of a fixed amount every month over a fixed tenure. Almost all major private and Government Banks in India offer Recurring Deposit schemes with competitive interest rates. Generally, the interest rate for a RD scheme is based on several factors like tenure, principal amount and the plan that you choose. Also, the interest rate for recurring deposit schemes vary from bank to bank and it is important that you are well informed about the interest rates offered by all major banks so you can zero in the perfect Recurring Deposit plan for investing your hard earned money.

Read on to find more about the best Recurring Deposit interest rates in India

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  • PPF, Recurring Deposit and Other Small Saving Schemes Interest Rates Reduced

    As banks and other financial institutions are brimming with cash after demonetisation even after four months of its introduction, interest rates on saving schemes have been cut.

    Schemes like Public Provident Fund (PPF) and Kisan Vikas Patra (KVP) are expected to offer 0.1% less returns this year when compared to the previous year.

    While announcing this year, the Finance Ministry also suggested that small saving scheme rates will be changed every quarter and also announced the new rates for the ongoing April-June quarter.

    According to the revised rates, National Savings Certificate will earn an interest of 7.9% as opposed to 8%, while KVP will earn 7.7% as opposed to 7.8% last year.

    Sukanya Samriddhi Scheme, which was earning 8.5% last financial year will only earn 8.4% for the present quarter. The only scheme that retains its old pricing is the Five-Year Senior Citizen Saving Scheme, which will continue to provide 8.4% returns.

    Five-year recurring deposit has been reduced lower at 7.2 %.

    1st April, 2017

  • Rate of Interest on Small Savings Schemes Unchanged for January 2017 to March 2017

    Government has maintained rates on interest on small savings schemes such as Kisan Vikas Patra and PPF for January to March quarter even as many banks have started reducing their deposit rates. Since April 2016, interest rates of every small savings schemes have been recalibrated every quarter. For the January to March quarter, these have been maintained unchanged as compared to the October-December quarter.

    A notification from the finance ministry said that investments in PPF i.e., Public Provident Fund scheme will continue to avail annual rate of interest of 8% which is the same as the 5-year National Savings Certificate.

    12th January, 2017

  • RBI MPC Meeting to Deliberate on Repo Rate Cut

    The RBI MPC held its first meeting in October, 2016 when it cut the repo rate by 0.25%. The 6-member committee recently held its 2nd meeting in December to discuss a cut in policy rate following the impact of demonetisation. A minimum of 0.25% cut in the policy rate was expected in this policy review to regulate the balance between high liquidity, and interest rates. Since January, 2015, the policy rate has been cut by 1.75%.

    6th December, 2016

  • Investors Looking To Invest in Government Bonds and Post Office Deposits As Banks Reduce Deposit Rates

    Following the move taken by banks to slash interest rates, investors are now looking to lock their funds in government and post office deposits, which have not yet cut their interest rates. Currently, bank deposits offer a maximum interest of 7%, whereas post office deposits offer a slightly higher rate of 7.8% and the government bonds the highest, at 8%. Experts are of the view that government bonds do not have any reinvestment risk since the funds can be locked in for a tenure of 6 years for a high interest rate of 8%. This is ideal for individuals whose income is not taxable or those who fall under the marginal tax bracket. The minimum amount of the investment is around Rs 1000 and there is no cap on the upper limit.

    Bank interest rates have taken a tumble since demonetization and leading banks such as SBI, ICICI, HDFC Bank, Kotak Bank and some others have slashed their deposit rates by around 15-25 basis points. Post the rate cut, State Bank of India offers a deposit rate of 6.5% and HDFC now offers 6.75%. Finance companies, like banks, have also followed in the footsteps of banks lowered deposit rates. Gruh Finance is now offering a revised rate of 7.5%.

    24th November, 2016

  • All India Bank Depositors Ask for Real Rate of Interest

    The All India Bank Depositors Association has requested the Reserve Bank of India to make sure that a real interest rate of 2.5% to 3% is applicable on post-tax basis on all the term deposits. This was stated by the president of the All India Bank Depositors Association, SS Bhandare. The fall in interest rate is going to be helpful for the depositors.

    20th November, 2016

  • Lower Deposit Rates Leading Depositors to Diversification of Assets

    With the continued fall in bank deposit rates unlikely to stop, a number of people have begun putting their money into mutual funds, currency and tax free bonds to get higher returns.

    Stakeholders predict the current slide will continue as banks face increasing competition from financial instruments like shares and debentures when it comes to higher returns.

    With deposit interest rates sinking, the issue of long-term tax-free bonds has increased, leading to a deceleration in deposits in most banks.

    The Reserve Bank of India has reported that the deceleration percentage has reached 9.3%, the highest rate since 1963-64.

    This would be detrimental to many sectors whose access to funding would be curtailed due to a reduced flow of capital in deposits in the long run.

    However, in spite of this, average saving by households has increased as individuals put their money into other financial instruments that provide higher returns.

    23rd October 2016

  • Interest Earned on Bank Deposits By Indians At An All-Time Low

    Interest gained on small-savings and fixed deposit accounts have hit a record low for millions across the country, as suggested by the Finance Ministry in the the Indian Public Finance Statistics for 2015-16.This has happened despite the interest rates on normal savings account remaining steady at 4% under the NDA government – but with consumer inflation over 5% - which has caused the regular savings holder to lose money.

    The first year of NDA government had seen an interest rate of 8.4% for a fixed deposit of three years, the same as under the erstwhile UPA-ll government. However there has been a visible decline in interest rates over the last one year on such deposits. The five-year fixed deposit – the most conventional planning device of the middle class – now carries a rate of 7.9% as opposed to 8.4% last year. In 2000, the interest had been more than 11%. This also hits those looking to buy a car or going on a trip by utilizing recurring deposit – the rates on these regular savings schemes have dropped to 7.4%.

    14th October 2016

  • RBI Cuts Benchmark Rates in Recent Credit Policy Announcement

    The RBI in its latest credit policy announcement on October 4th cut the benchmark rate by 25 basis points. The repo rate, the interest rate at which RBI lends to commercial banks, was revised from 6.5% to 6.25%. The rate cut has significant ramifications on consumers seeking and paying off loans as well as investors. As far as borrowers are concerned, the RBI Governor Urjit Patel expressed displeasure over banks not effectively passing on rate cuts to consumers. He also expressed his interest in reviewing the current nature of MCLR in determining lending rates. If action is taken swiftly, rate cuts are expected to be transmitted faster to consumers, thereby reducing the cost of borrowing.

    10th October 2016

  • Cut on PPF Interest Rates and Other Saving Schemes Interest Rates

    There has been small reduction in the rates of interests on small saving schemes. The marginal reduction is of 0.1% for the time period between October and December, 2017. Returns on PPF (Public Provident Fund), Sukanya Samriddhi Account and Kisan Vikas Patra will be low.

    On a 5-year RD (Recurring Deposit), the depositors will be getting an interest rate of 7.3%. this has been applicable on and from October 1, 2016. Previously, the depositors could avail an interest rate of 7.4%. The rate of interest applicable on savings deposit remains unchanged at 4%.

    30th September 2016

  • Interest to be Paid Quarterly by Banks as per new RBI Directive

    Scheduled commercial banks have to pay interest on savings accounts quarterly, according to the Reserve Bank of India’s new directive. Currently, interest is paid half yearly for these accounts.

    This will be applicable for money deposits except current account deposits for both domestic, foreign currency as well as NRO and NRE accounts.

    RBI has also directed banks to have a board-approved interest rate policy, with uniform rates for customers and across branches.

    It has also stated that interest to be paid on deposits should adhere to the interest rate schedule that is determined in advance, and there should be no negotiations regarding the same.

    With regard to recurring deposits, banks have been directed to make interest payments for any non-business working days based on the maturity value.

    For deposits that are transferred between branches as a result of takeovers in semi-urban and rural areas, the deposits have to conform to the conditions set by the bank being taken over.

    Commercial banks can decide on the interest rates payable on their savings account, but a uniform rate is to be offered for deposits up to Rs. 1 lakh.

    15th March 2016

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