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  • Tax on Recurring Deposit Interest Rates

    If you are looking for a way to invest small amounts every month as opposed to investing a lump sum amount at once, recurring deposits are your answer. Recurring deposits are term deposits that let you deposit a sum of money every month for a fixed period of time, giving you interest rates that are similar to what you earn on fixed deposits.

    To open a recurring deposit account with any bank, you need to have a savings account with the bank whose recurring deposit scheme you have chosen. You can deposit the money in your savings account, which will be deducted every month by the bank and transferred to the recurring deposit account

    TDS on Recurring Deposit

    Tax on Recurring Deposit

    Similar to most personal savings instruments and fixed deposit, recurring deposits to, attract tax. However, recurring deposits attract TDS, better known as Tax Deducted at Source. TDS is also known as the income tax which is applicable for Indian citizens, under The Income Tax Act of 1961. These laws stay the same, except minor amendments and adjustments in the taxation slab.

    Income Tax on Recurring Deposit Amount

    The money that is invested in a recurring deposit every year, will be counted as a part of the yearly income of the investor. A TDS (Tax Deducted at Source) of 10 percent is deducted on the interest you earn on your recurring deposit. The TDS is not deducted if the interest you earn on your recurring deposit is up to Rs.10,000. The TDS will be 20 percent, if you fail to provide the PAN information to the bank.

    If their income falls under the non-taxable income slab, they still have to submit the Form 15G to be taxed for both fixed and recurring deposits.

    Form 15G Form 15H and Form 16A

    Form 15G is a must if you want to save taxation on your income. However, From 16A is a form that is filled and provided to you by your employer, who deducts the TDS from your income. Note, that regardless of being eligible for TDS on your income, you will be provided with the Form 16A. Also, keep it in mind that the Form 15G is applicable for people who are under 60 years of age. Form 15H is a similar form for ITR submission, like Form 15G, but is only meant for people who are 60 years and over (senior citizens).

    Current Income Taxation Slab 2017-18: Resident Individual Below The Age of 60 Years

    To get you knowing whether you need to furnish the Form 15G and submit it for your income tax, checkout the income taxation slab below:

    Annual Income (in Indian Rupees) Tax Rate TDS on Recurring Deposit Interest Earned (if interest is more than Rs.10,000)
    Less than Rs. 2.50 lakhs Not Applicable 10%
    Between Rs.2.5 lakhs and Rs.5 lakhs 5% of sum exceeding Rs.2.5 lakhs 10%
    Between Rs.5 lakhs and Rs.10 lakhs 20% of sum exceeding Rs.5 lakhs 10%
    Over Rs. 10 lakhs 30% of sum exceeding Rs.10 lakhs 10%

    * As of April, 2017

    Surcharge:

    10% of income tax, where total income is between Rs. 50 lakhs and Rs.1 crore.

    15% of income tax, where total income exceeds Rs. 1 crore.

    Recurring Deposit Tax Exemption

    There are certain instruments that are categorized as recurring deposit with income tax exemption, although rare. People do look for tax saving recurring deposits to make sure that their savings are not wasted. Unfortunately, very restricted amount of information is available on recurring deposit interest is taxable or not.

    Tax Exemption on Post Office Recurring Deposit Scheme

    Tax exemption for your recurring deposit is only possible if you invest in RD with India Post. It should also be at least a 5-year scheme. This is possible under Section 80C of the Income Tax Act of 1961. The maximum taxable deduction can be for Rs. 1,00,000 which will all the savings investments that are eligible for tax deduction under Section 80C.

    For Example – Say you earn an interest of Rs.20, 000 on your recurring deposit for a year and your annual income is Rs.3, 00, 000. This means you are liable to pay an income tax of 10 percent on Rs.50, 000 (No tax up to Rs.2.5 Lakhs), which amounts to Rs.5000 and TDS of Rs.2000 is deducted on the interest earned on your recurring deposit. So, at the end of the year you have to pay Rs.3000 to the government as income tax. The bank will give you a TDS certificate proving that you have paid the Rs.2000 to the government already.

    Read More Article on Recurring Deposit

    News About Tax on Recurring Deposit Interest Rates

    • EPFO Has Cut the Interest on EPF to 8.65%

      The Employees Provident Fund Organisation has made a small cut in the interest on EPF to 8.65%. EPFO invests 65% of its funds in government securities. Besides the tax free status, the interest rates offered by EPFO are higher compared to other zero-risk investment schemes. PPF has similar tax free status, and offers 8% rate of interest. Most bank deposit schemes like that of a 1-year post-office deposit, offer up to 5.6% interest rate, and the earnings are taxable. While a 5-year NSC offers 6.4% interest rate p.a, the earnings are taxable. NSC also offers tax benefits under Section 80C. Some believe that the Finance Minister could consider revising tax benefits for investment products in the new budget.

      22nd December, 2016

    Recurring Deposit - Sitemap

    RD Reviews

  • Page 1 of 48 1 2 3 4 5
    • ICICI Bank Recurring Deposit
      "Great banking service"
      ICICI BANK
      0.5 4.0/5 "Great!"
      It was almost seven years now with the ICICI bank on recurring deposit. The website was very good where I can get my statement. Android app could be better. I pay monthly around 8K via online banking. I like them for the service since I maintained my saving and salary account. The things could have been better with respective of email intimation.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Nov 18, 2017
    • SBI Recurring Deposit
      "Good service"
      STATE BANK OF INDIA
      0.5 4.0/5 "Great!"
      As I'm a long time customer with State bank of India for around 12 years and as I liked their banking services so I started a recurring deposit with State bank of India 5 years ago. I pay Rs. 3000 monthly and keep on renewing it after every year when the tenure ends.
      Was this review helpful? 0
      , faridabad
      Reviewed on Nov 18, 2017
    • IDBI Recurring Deposit
      "Average service"
      IDBI BANK
      0.5 3.0/5 "Satisfactory"
      I have a savings account with IDBI bank for the past 5 years. As a long time customer with IDBI bank I trusted them and invested some money recurring deposit with IDBI itself. I renew this recurring deposit account every year. I get a interest of 7% which is very less.
      Was this review helpful? 0
      , delhi
      Reviewed on Nov 17, 2017
    • SBI Recurring Deposit
      "Good service"
      STATE BANK OF INDIA
      0.5 4.0/5 "Great!"
      As I have a savings account with State Bank of India I started a recurring deposit account with them. But I'm really not sure about the interest rates they provide me but it's good for both my RD accounts in this State bank of India as well as the other bank IOC.
      Was this review helpful? 0
      , kolkata
      Reviewed on Nov 17, 2017
    • Kotak Recurring Deposit
      "Satisfactory & happy"
      KOTAK MAHINDRA BANK
      0.5 4.5/5 "Excellent!"
      They are giving 6% interest rate for the Recurring Deposit. It was a very good service with Kotak. The request has been placed online. I have chosen Kotak because they are giving more benefits and high potentials. The customer service and response is good.
      Was this review helpful? 0
      , kolkata
      Reviewed on Nov 16, 2017
    • SBI Recurring Deposit
      "Excellent in service , hike in interest rate"
      STATE BANK OF INDIA
      0.5 5.0/5 "Blown Away!"
      I have invested in recurring deposit and the return value is good based on the pre tax which was levied and it was levied based on certain circumstances. I would like to say that the customer service is good one with them, also I really dont have any issues on it.
      Was this review helpful? 0
      , bangalore
      Reviewed on Nov 16, 2017
    • Tamilnad Mercantile Bank Recurring Deposit
      "Excellent "
      TAMILNAD MERCANTILE BANK
      0.5 4.5/5 "Excellent!"
      The rate of interest is higher for RD with Tamilnad Mercantile Bank compared to others, I will get a good return. I pay 2000rupees per month.The statements will be sent out to my mobile number or email address . For the maturity period they will inform the customer 1 week before. Manager will call the customer directly. There is no compulsion for the customer it is based up on their own interest. It is a tenure of 7 years.
      Was this review helpful? 0
      , madurai
      Reviewed on Nov 13, 2017
    • HDFC Bank Recurring Deposit
      "Secure Deposit"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      I have taken a recurring deposit with HDFC bank. The total tenure for this deposit is for 60 months. They have given a rate of interest of 7.90% and now its lowered to 6.75 percentage. Monthly from my HDFC savings account they will deduct that amount.
      Was this review helpful? 0
      , chennai
      Reviewed on Nov 08, 2017
    • Vijaya Bank Recurring Deposit
      "Excellent"
      VIJAYA BANK
      0.5 5.0/5 "Blown Away!"
      I had a recurring deposit from Vijaya Bank and the process for that was also good. I have no hassles with the bank as they have always been proper in their response to the customer. The benefits of this account is also fine and I no longer use the account. I have closed it.
      Was this review helpful? 0
      , bangalore
      Reviewed on Nov 06, 2017
    • ICICI Bank Recurring Deposit
      "Excellent service"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      I never find any difficulty with my ICICI requiring deposit service I am using ICICI mobile application so the every transaction will be done through online so I don't need to contact their branch or their staffs their mobile application is very easy to use and user friendly it was totally a good experience with ICICI.
      Was this review helpful? 0
      , chennai
      Reviewed on Nov 01, 2017
    • Syndicate Bank Recurring Deposit
      "Good Service"
      SYNDICATE BANK
      0.5 4.0/5 "Great!"
      As I have a savings account with SYNDICATE BANK I started a recurring deposit account also with them. I have been holding this recurring deposit account for the past 8 months. I pay Rs. 500 for this recurring deposit account. I get an interest of around 8%.
      Was this review helpful? 0
      , guntur
      Reviewed on Oct 31, 2017
    • SBI Recurring Deposit
      "Not a good investment"
      STATE BANK OF INDIA
      0.5 2.0/5 "Expected more"
      I created this Recurring Depoist account some time back and the return I got was little disappointing. I had paid Rs.10000 every month and was expecting a 7.25% Interest. But at the end, after the cut of all taxes I recieved only 4.5% profit, which for me is pure waste of investment.
      Was this review helpful? 0
      , ghaziabad
      Reviewed on Oct 29, 2017
    • HDFC Bank Recurring Deposit
      "Good Service"
      HDFC BANK
      0.5 4.0/5 "Great!"
      I have my salary account with HDFC bank so I thought of holding a Recurring deposit account with them as their services are good. Now I have been holding a Recurring deposit account with them for the past 1 year. I remember for the last 6 months I'm paying between Rs. 1000 to Rs. 2000 monthly. They give me 5.25% as interest.
      Was this review helpful? 0
      , new delhi
      Reviewed on Oct 28, 2017
    • HDFC Bank Recurring Deposit
      "Good Saving"
      HDFC BANK
      0.5 4.0/5 "Great!"
      Holding Recurring deposit account with HDFC, I used to pay Rs. 3000 on every month, it has tenure of one year, But the interest rate is very low like the banks norms. I think HDFC Is providing 6% of interest for the RD account, I am using it only for the investment purpose.
      Was this review helpful? 0
      , pune
      Reviewed on Oct 25, 2017
    • HDFC Bank Recurring Deposit
      "Very good account"
      HDFC BANK
      0.5 5.0/5 "Blown Away!"
      HDFC Bank is my corporate account and my salary account is with HDFC. The reason why I had chosen HDFC for the Recurring Deposit was because of the interest rate which is 6% and it is the best and we have to pay monthly 1200 . This Recurring Deposit request was placed online. I can also view my maturity instructions online
      Was this review helpful? 0
      , new delhi
      Reviewed on Oct 17, 2017
    • HDFC Bank Recurring Deposit
      "Good Saving"
      HDFC BANK
      0.5 3.0/5 "Satisfactory"
      Generally invest Rs.10,000 on monthly average in my HDFC recurring deposit account. It has the tenure of two years, after maturity period I would get the amount around 30,000 and above. I am satisfied with them, online transaction is easy to make the payment.
      Was this review helpful? 0
      , chandigarh
      Reviewed on Oct 13, 2017
    • ICICI Bank Recurring Deposit
      "Good saving and convenient saving"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      ICICI recurring deposit is very convenient to access through online, I opened RD through netbanking it was simple. Currently I am investing Rs.5000 for a year , I get 6.9% of interest per annum. I am could do the liquidity through online, but there was some charge applicable around Rs.300.
      Was this review helpful? 0
      , pune
      Reviewed on Oct 12, 2017
    • Axis Bank Recurring Deposit
      "Average Service"
      AXIS BANK
      0.5 3.5/5 "Pretty good"
      As I'm holding my salary account with AXIS Bank I decided to maintain a Recurring Deposit account with them. Now I have this account for the past 1 year. They offer me 7 to 8% interest. The funds did not auto debited from my salary account to this RD account. Every month I had to visit the bank. After 4 months then this problem got rectified. The interests can be improved.
      Was this review helpful? 0
      , delhi
      Reviewed on Oct 09, 2017
    • ICICI Bank Recurring Deposit
      "Best"
      ICICI BANK
      0.5 5.0/5 "Blown Away!"
      I am having the recurring deposit with the ICICI bnak and the interest rate is around 8.5%, also their customer service is nice one for me, also their response too. Online banking services are good one with the ICICI bank.
      Was this review helpful? 0
      , panvel
      Reviewed on Oct 07, 2017
    • Canara Bank Recurring Deposit
      "Excellent Service"
      CANARA BANK
      0.5 5.0/5 "Blown Away!"
      I have been holding an Recurring deposit in the CANARA BANK for few years now. As I liked CANARA BANK very much I hold this here. All services are good in this CANARA BANK. Every month I pay Rs. 60000 to this. My interest for this recurring deposit is 8.5% - 9%.
      Was this review helpful? 0
      , bangalore
      Reviewed on Sep 30, 2017
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