We compare the Recurring Deposit Interest Rates (or RD Interest Rates) across 40 major banks in India so that you can invest in the best RD. Recurring Deposit is very popular way to save money especially for people with regular income or house wives. This is because RD forces you to save a fixed amount for pre-defined period. At maturity you are paid the accumulated amount which you can put to good use. For e.g. if you deposit Rs 1,000 every month for 5 years at 7%, you would get about Rs 72,000 at maturity.
You might want to bookmark this page as the RD interest rates would be updated every month which would help you in making better decision.
Following are the highest Interest rates on Recurring Deposits based on duration:
Fixed Deposit with Banks is one of the most popular and convenient investment option. To help you choose the best, we compare the interest rates on fixed deposit across all major 48 banks in India including government, private, foreign and small financial banks in India every month. This may prove to be quite handy for you in choose the Best Bank FD scheme.
The table below gives the Interest Rates sorted by Bank Name. The best interest rates for all duration have been highlighted.
Bank | Type of Bank | 1 Year | 2 Years | 3 years | 4 Years | 5 Years | 5+ years |
---|---|---|---|---|---|---|---|
AU Small Finance Bank | Small Bank | 6.35% | 6.25% | 6.50% | 6.25% | 6.25% | 6.50% |
Axis Bank | Private | 5.15% | 5.25% | 5.40% | 5.40% | 5.75% | 5.75% |
Bandhan Bank | Private | 5.75% | 5.75% | 5.50% | 5.50% | 5.50% | 5.50% |
Bank of Baroda | Post Office | 4.90% | 5.00% | 5.10% | 5.25% | 5.25% | 5.25% |
Bank of India | Government | 5.25% | 5.30% | 5.30% | 5.30% | 5.30% | 5.30% |
Bank of Maharashtra | Government | 4.90% | 4.90% | 4.90% | 4.90% | 4.90% | 4.90% |
Canara Bank | Government | 5.20% | 5.40% | 5.50% | 5.50% | 5.50% | 5.50% |
Capital Small Finance Bank | Small Bank | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% |
Catholic Syrian Bank | Private | 5.00% | 5.00% | 5.00% | 5.25% | 5.25% | 5.75% |
Central Bank of India | Government | 4.90% | 5.00% | 5.00% | 5.00% | 5.10% | 5.10% |
Citibank | Foreign | 2.75% | 3.00% | x | x | x | x |
City Union Bank | Private | 5.00% | 5.50% | 5.50% | 5.50% | 5.50% | 5.25% |
DCB Bank | Private | 5.80% | 6.00% | 6.50% | 6.50% | 6.50% | 6.50% |
Deutsche Bank | Foreign | 4.00% | 4.25% | 4.50% | 5.00% | 6.25% | x |
Dhanalakshmi Bank | Private | 5.25% | 5.25% | 5.40% | 5.50% | 5.50% | 5.60% |
Digibank by DBS | Foreign | 4.25% | 4.50% | 5.50% | 5.50% | 5.50% | 5.50% |
Equitas Small Finance Bank | small Bank | 6.50% | 6.65% | 6.65% | 6.40% | 6.40% | 6.65% |
ESAF Small Finance Bank | Small Bank | 6.50% | 6.50% | 6.25% | 6.00% | 6.00% | 5.50% |
Federal Bank | Private | 5.10% | 5.35% | 5.35% | 5.35% | 5.50% | 5.50% |
Fincare Small Finance Bank | Small Bank | x | x | x | x | x | x |
HDFC Bank | Private | 4.90% | 4.90% | 5.15% | 5.30% | 5.30% | 5.50% |
ICICI Bank | Private | 4.90% | 5.00% | 5.15% | 5.35% | 5.35% | 5.50% |
IDBI Bank | Private | 4.90% | 5.00% | 5.25% | 5.25% | 5.25% | 5.25% |
IDFC First Bank | Private | 5.75% | 6.00% | 6.00% | 6.00% | 6.00% | 5.25% |
Indian Bank | Government | 5.00% | 5.10% | 5.25% | 5.25% | 5.25% | 5.15% |
Indian Overseas Bank | Government | 5.20% | 5.25% | 5.25% | 5.25% | 5.25% | 5.25% |
Indus Ind Bank | Private | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% | 6.25% |
J&K Bank | Government | 5.10% | 5.20% | 5.30% | 5.30% | 5.30% | 5.30% |
Jana Small Finance Bank | Small Bank | 7.00% | 7.00% | 7.25% | 7.25% | 7.25% | 6.50% |
Karnataka Bank | Private | 5.30% | 5.55% | 5.55% | 5.55% | 5.55% | 5.70% |
Karur Vysya Bank | Private | 5.50% | 5.50% | 5.65% | 5.65% | 5.75% | 5.75% |
Kotak Mahindra Bank | Private | 4.50% | 5.00% | 5.10% | 5.25% | 5.30% | 5.30% |
Nainital Bank | Private | 5.25% | 5.35% | 5.35% | 5.35% | 5.35% | 5.35% |
North East Small Finance Bank | Small Bank | 6.75% | 6.75% | 6.75% | 6.50% | 6.50% | 6.25% |
Post Office 5 Year RD | Post Office | x | x | x | x | 5.80% | x |
Punjab and Sind Bank | Government | 5.15% | 5.15% | 5.30% | 5.30% | 5.30% | 5.30% |
Punjab National Bank | Government | 5.10% | 5.10% | 5.25% | 5.25% | 5.25% | 5.25% |
Ratnakar Bank | Private | 6.10% | 6.10% | 6.30% | 6.30% | 6.30% | 6.00% |
South Indian Bank | Private | 5.40% | 5.40% | 5.50% | 5.50% | 5.65% | 5.50% |
Standard Charted Bank | Foreign | 5.30% | 5.40% | x | x | x | x |
State Bank of India | Government | 4.40% | 5.10% | 5.30% | 5.30% | 5.30% | 5.40% |
Suryoday Small Finance Bank | Small Bank | 6.75% | 7.00% | 7.10% | 7.10% | 7.25% | 6.50% |
Tamilnad Mercantile Bank | Private | 5.75% | 5.75% | 5.65% | 5.50% | 5.50% | 5.50% |
UCO Bank | Government | 4.90% | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% |
Ujjivan Small Finance Bank | Small Bank | 6.50% | 6.75% | 6.75% | 6.75% | 6.75% | 5.80% |
Union Bank of India | Government | 5.30% | 5.30% | 5.50% | 5.55% | 5.55% | 5.60% |
Utkarsh Small Finance Bank | Small Bank | 6.75% | 6.75% | 6.75% | 6.75% | 6.75% | 6.75% |
Yes Bank | Private | 6.00% | 6.25% | 6.50% | 6.50% | 6.75% | 6.75% |
Disclaimer: The Recurring Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your RD.
We looked at more than 55 years history of gold to see if its a good idea to invest in Gold. We concluded that its more volatile than perceived but investing in long term may provide you with more stable returns. You can look at the complete analysis and our conclusion here – Looking at Gold Price History in India – Should you Invest in Gold?
The interest on bank’s Recurring Deposit is compounded quarterly and is computed using the formula below.
M=R[(1+i) (n-1)]/1-(1+i)(-1/3))
Where, M = Maturity value
R = Monthly Instalment [60 for Post office RD]
N = number of quarters (tenure) [20 for Post office RD]
i = Rate of interest/400
Recurring Deposit suits people with regular income and who want to accumulate a fixed amount for certain time frame. An example could be if you want to buy car in next 2 years, you can easily open a RD account with any leading bank and start saving. If you deposit Rs 5,000 every month for 2 years at 7%, you would get about Rs 1,29,000 at maturity. This would be good for downpayment of the car.
It’s also for people who do not have lump sum amount to take advantage of high interest rates. An example is in March 2013 SBI was offering 9% interest rate on their recurring deposits for 10 years. I had opened a RD with Rs 5,000 just to lock a high interest rate for 10 years. On maturity I would get about Rs 9.7 lakhs – which is good accumulated amount. As of today SBI is offering 5.4%. So I have a good investment. It’s always good idea to lock when interest rate cycle reverses and it goes high.
Do you know you pay a few thousand rupees every year to hidden charges of banks. This could range from more known fines for not maintaining minimum balance amount to lesser know POSDEC charge of ICICI Bank. There could be charges for ATM usage, branch visits, cheque books and so on. Do read our article on Hidden Charges in Banks and what you can do about it?
A question I am often asked is what is the difference between recurring deposit and fixed deposit. Both products have quite a similarity in terms of following:
In spite of all the similarities between FD & RD, they are meant for different kind of goals and suits different people and situations. In case you already have lump sum amount available go with FD as you start getting interest on entire investment from day 1. RD is more suited for regular savings and helps you accumulate a large amount over period of time.
In case of RD the interest received is added to the income and taxed at marginal tax slab. TDS (Tax deduction at source) at the rate of 10% (started from June 2015) is deducted, if the interest income is more than Rs 40,000 in financial year per bank (changed from Rs 10,000 limit in Budget 2019). In case of Senior citizens TDS would be deducted at the rate of 10%, if the interest income exceeds Rs 50,000. This interest would be added across all branches of a bank and across all RDs/FDs for a customer to calculate the TDS. The TDS is 20% in case the bank does not have your PAN number.
Budget 2018 introduced a new section 80TTB, which gives additional tax exemption up to Rs 50,000 to Senior Citizens for interest income. Additionally, the threshold for TDS (Tax Deduction at Source) on interest income for Senior Citizens has been raised from Rs 10,000 to Rs 50.000 from FY 2018-19. In case your income is less than the income tax threshold you can avoid TDS by filling and submitting Form 15H to relevant banks and financial institutions.
Yes Bank and DCB Bank offers 6.75% for 3 years to 10 years recurring deposit.
Suryoday Small Finance Bank & Jana Small Finance Bank offers 7.25% for 3 to 5 years recurring deposit.
For RD duration of 1 Year Indus Ind Bank offers 6.50% while For RD duration of 1 Year Jana Small Finance Bank offers 7.00%.
For 5 Years RD duration the best interest is offered at 7.25% by Suryoday Small Finance Bank & Jana Small Finance Bank. For 5 Years RD duration the best interest is offered at 6.75% by Yes Bank and DCB Bank
Most banks offer RD for 6 months to 10 years.
Generally speaking bank FDs/RDs are safe as banks are rigorously monitored by RBI. The FD in Government owned banks like SBI, PNB are the safest. This is because government would intervene and pay the depositors. Next is big private banks like ICICI & HDFC followed by smaller private banks. After this we have small finance banks. Co-operative banks are worst of the lot and I would not trust them with my money. So until there are compelling circumstances keep away from co-operative banks. You can learn from recent example where Yes Bank was rescued by the government and no depositors suffered. However depositors of PMC Bank (a co-operative bank) are still suffering. You can learn more about this in our detailed article about How safe is your Bank Fixed Deposit?
The interest earned on recurring deposit is taxable as per your income tax slab. For senior citizens an additional exemption of Rs 50,000 under section 80TTB is available for interest income from banks/post office.
Yes most banks offer loans up to 90% to 95% of recurring deposit balance.
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View Comments
15 G or 15 H is submit in every quarter on ones in year ?
Form 15G/H has to be submitted once every financial year. You should ideally do it at the start of the FY (i.e. in April) or when you start investment.
April update!!!!!!!!!
Done :)
No reply, no update
If RD is more than or equal to 5 years, is it still taxable interest?
For long term deposits above 5 y, it wont be TAX I think so. Any update on this please.
All RDs are taxable irrespective of the duration of investment. You can read more about Tax on RD & FD here.
thank u so much for all the information...pls can you guide me which is better for children education sip or thru rd and fd when time period is 4-5 years
For 4-5 years period equity mutual funds would be risky bet. If you are in lower tax bracket I would recommend Recurring deposit and in case of higher tax bracket go for SIP in debt/debt dominant mutual fund.
Is the interest rate on RD for vijaya bank compunded quaterly?
Yes it should be as most Indian banks follow quarterly interest payouts
In April recurring deposit interest rate will reduce?
There are high chances that interest rates might come down going forward. It would happen in next few days or next few months is difficult to predict. But Post Office RD is for sure going to come down in April.
I wanted to invest 10000 per month towards RD and since I have a HDFC salary account, I thought of opening one RD accont in HDFC itself. Now when I used the HDFC RD calculator, it shows 7.90% interest for 12 months, but after amount after maturity is only 125,262 when it should be 127,900. Any reason why it is 125,262?
The interest is compounded quarterly for most banks so the maturity amount shown by HDFC is correct. I think you took interest as monthly compounding.
Thanks for the details. I just have a below question, and request a reply to this, as I need to open RD based on your answer. If I open an RD for 3 years with a monthly investment of 10000 at 8.75% interest rate,
1) Will the bank deduct the TDS of 10 % on the total interest accrued in the 3rd year minus 10000, which means deduct TDS for 42562 (52562-10000) OR
2) Will it consider RD being invested in three years and deduct only for 22562 (52562-30000)?
The bank would deduct TDS every year if the total interest received on all your deposits (except saving account) across the bank branch is more than Rs 10,000. So if the total interest for FY 2015-16 is Rs 11,000 - the TDS would be Rs 1,100.
Amit , how safe is Deutsche Bank
In general all banks are safe as they are very closely regulated. Co-operative banks are the riskiest of the lot mainly due to mismanagement and political interference. Even government owned banks have poor lending practice as the recent NPAs show but the depositors need not worry as in worst case government would print money and pay back depositors. Also government would not let big private banks to fail as it would have very adverse impact on economy and other banks. As far as foreign banks are concerned I would say they are safer than co-operative banks and riskier than big private banks. Deutsche is in this category!
WHICH BANK GIVE ONE YEAR RD FOR Rs.50/MONTH
I am not sure about Rs 50/month RD but most public sector banks offer Recurring deposit with minimum monthly installment of Rs 100