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Best Recurring Deposit Interest Rates in India

When it comes to risk-free investments, a recurring deposit is one of the popular options available to you. Under this investment scheme, you need to deposit a fixed amount every month for a specific period of time. You will earn interest on the invested amount as per the interest rate offered by the bank with which the Recurring Deposit account is opened.

Best RD Interest Rates for Top Banks in India

Listed below are the interest rates offered to the general public by various banks operating in the country that allows you to open a recurring deposit account with them. The rates have been segregated according to various investment periods. Scroll through to get an idea of the rates offered:

Recurring Deposit Interest Rates Bank wise
Bank Tenures (p.a.)
1 year 2 years 3 years 4 years 5 years More than 5 years
Andhra Bank RD Interest Rates 5.00% 5.40% 5.50% 5.50% 5.60% 5.60%
Allahabad Bank RD Interest Rates 5.00% 5.10% 5.15% 5.15% 5.15% 5.15%
Axis Bank RD Interest Rates 4.40% 5.25% 5.50% 5.50% 5.75% 5.75%
Bandhan Bank RD Interest Rates 5.50% 5.50% 5.25% 5.25% 5.00% 5.00%
BOM RD Interest Rates 4.90% 4.90% 4.90% 4.90% 4.90% 4.90%
BOB RD Interest Rates 4.90% 5.10% 5.25% 5.25% 5.25% 5.25%
BOI RD Interest Rates 5.00% 5.05% 5.05% 5.05% 5.05% 5.05%
Canara Bank RD Interest Rates 5.10% 5.10% 5.25% 5.25% 5.25% 5.25%
Central Bank of India RD Interest Rates 4.90% 5.00% 5.00% 5.00% 5.00% 5.00%
City Union Bank RD Interest Rates 5.00% 5.25% 5.00% 5.00% 5.00% 5.00%
Corporation Bank RD Interest Rates 5.00% 5.40% 5.50% 5.50% 5.50% 5.60%
Citi Bank RD Interest Rates 2.75% 3.00% NA NA NA NA
DBS Bank RD Interest Rates 4.25% 4.55% 5.50% 5.50% 5.50% 5.50%
Deutsche Bank RD Interest Rates 4.25% 4.50% 5.00% 5.25% 6.25% NA
Dhanlaxmi Bank RD Interest Rates 5.15% 5.30% 5.30% 5.40% 5.40% 5.50%
Federal Bank RD Interest Rates 5.10% 5.35% 5.35% 5.35% 5.60% 5.60%
HDFC Bank RD Interest Rates 4.90% 5.15% 5.30% 5.30% 5.30% 5.50%
Indian Overseas Bank RD Interest Rates 5.20% 5.25% 5.25% 5.25% 5.25% 5.25%
ICICI Bank RD Interest Rates 3.75% 4.40% 4.40% 4.40% 4.40% 4.40%
IDBI Bank RD Interest Rates 5.05% 5.20% 5.40% 5.40% 5.25% 4.80% to 5.25%
Indian Bank RD Interest Rates 5.10% 5.15% 5.15% 5.15% 5.15% 5.15%
IndusInd Bank RD Interest Rates 6.00% 6.00% 6.00% 6.00% 5.50% 5.50%
J&K Bank RD Interest Rates 5.10% 5.20% 5.30% 5.30% 5.30% 5.30%
Karnataka Bank RD Interest Rates 5.20% 5.50% 5.50% 5.50% 5.60% 5.60%
Karur Vysya Bank RD Interest Rates 5.25% 5.50% 5.50% 5.50% 5.75% 5.75%
Kotak Mahindra RD Interest Rates 4.50% 5.00% 5.10% 5.20% 5.25% 5.25%
Laxmi Vilas Bank RD Interest Rates 5.00% 4.75% 5.50% 5.50% 5.50% 5.50%
Oriental Bank of Commerce RD Interest Rates 5.00% 5.10% 5.25% 5.25% 5.25% 5.25%
PNB RD Interest Rates 5.00% 5.10% 5.25% 5.25% 5.25% 5.25%
Punjab & Sind Bank RD Interest Rates 5.15% 5.15% 5.30% 5.30% 5.30% 5.30%
Saraswat Bank RD Interest Rates 5.25% 5.25% 5.45% 5.45% 5.85% 5.85%
South Indian Bank RD Interest Rates 5.40% 5.40% 5.50% 5.50% 5.65% 5.65%
SBI RD Interest Rates 4.90% 5.10% 5.30% 5.30% 5.40% 5.40%
Syndicate Bank RD Interest Rates 5.10% 5.10% 5.25% 5.25% 5.25% 5.25%
TMB RD Interest Rates 5.50% 5.50% 5.25% 5.25% 5.25% 5.25%
UCO Bank RD Interest Rates 4.90% 5.00% 5.00% 5.00% 5.00% 5.00%
Union Bank RD Interest Rates 5.00% 5.40% 5.50% 5.50% 5.60% 5.60%
United Bank RD Interest Rates 5.15% 5.15% 5.30% 5.30% 5.30% 5.30%
Yes Bank RD Interest Rates 5.75% 6.00% 6.25% 6.25% 6.50% 6.50%
Post office (5 years) 5.5% 5.5% 5.5 % NA 6.7 % NA

Best Recurring Deposit Scheme in India with Highest Interest Rates

Here are some banks that offer the best interest rates for RD schemes:

  • For 2-year tenure, one of the best highest interest rates are offered by Lakshmi Vilas Bank at 7.50% p.a. and then by Yes Bank at 7.50%.
  • For 3-year and 4-year tenures, you earn the best RD interest rates with Lakshmi Vilas Bank at 7.50% p.a.

How is the Interest Under the Recurring Deposit Scheme Calculated?

Under the recurring deposit scheme, interest is calculated after taking into consideration various factors like funds invested, tenure, and the RD scheme selected.

You can calculate the interest by using the RD calculator or the formula mentioned below:

M = R [(1+i) n – 1]/ 1 – (1+i) -1/3

In the formula,

‘M’ stands for maturity value

‘R’ stands for monthly instalment

‘n’ stands for number of quarters

‘i’ stands for rate of interest/400

Advantages and Disadvantages of opening an RD account

Advantages

  • No penalty if you miss installment: In case you fail to deposit an amount for a month, the bank will not penalise you.
  • Inculcates financial discipline: You deposit a certain sum of money every month which inculcates in you a financial discipline.
  • Easy to open an RD account: The process to open an RD account is extremely hassle-free and easy.
  • Minimum deposit of Rs.100: The minimum amount you need to deposit on a monthly basis is only Rs.100.

Disadvantages

  • Fixed installment amount: The amount you need to deposit on a monthly basis is fixed.
  • No returns if amount withdrawn during the lock-in period: If you withdraw your amount during the lock-in period you will not enjoy any returns.

Recurring Deposit Interest Rates FAQs

  1. Will the RD amount be directly credited to my bank account on the maturity date?

    Yes, the proceeding of your recurring deposit account on maturity will be automatically deposited to your bank account on the maturity date. In case the amount is yet to be deposited to the bank account, it is recommended you immediately get in touch with the bank’s customer care service.

  2. Is TDS applicable on Recurring Deposit?

    Yes, TDS will be applicable on the interest rate earned on the recurring deposit payable during the financial year as per the Finance Bill, 2015, effective June 1, 2015.

  3. Do RDs have nomination/beneficiary facility?

    Yes, if you open a recurring deposit account, you will also have to list the name of a nominee or a beneficiary who will receive the proceedings of the recurring deposits on the maturity date in case something happens to you. You also have the option of changing your nominee or beneficiary.

  4. Do senior citizens get any extra benefits?

    Yes, if you qualify to be a senior citizen of India, you will stand to earn 0.5% more interest on the deposits. Whatever rate of interest a non-senior citizen will stand to gain, a senior citizen will earn 0.5% more.

  5. What is the minimum deposit amount required for the opening of a recurring deposit account?

    The minimum amount you will have to deposit in order to open a recurring deposit account is Rs.500.

  6. How can I apply for a recurring deposit account?

    You can visit the official website of the bank from whom you would like to avail the recurring deposit facility. You can click on the ‘Apply Now’ option which is generally available on the main website. If you already have a bank account with the said bank, you can use the net banking facility to open a recurring deposit account.

  7. Can I use the RD Calculator?

    Yes, various banks offer the RD calculator on their official website. You can use the RD calculator and enter the amount you wish to determine, and the repayment tenure, and calculate the final amount you will stand to gain on the maturity date.

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