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
Incorrect Rates mentioned for HDFC Bank for the Month of Sept 2015. Please don't misguide People. Check HDFC website for further clarification
Please check the update date just before the table - it says last updated on - September 1, 2015. If you check HDFC Bank RD rates - it was updated on September 8, 2015.
Also there is a disclaimer below the table "Disclaimer: The Recurring Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your RD."
Please read carefully before you accuse and I don't gain anything by misguiding you :)
We update the most recent RD rates every month. For October we would be doing after October 5 as many banks would be changing their lending and deposit rates then.
Hi,
Am in chennai, i am a student i want to open saving account... which deposit plan suit me recurring deposit or fixed deposit. ..... and which bank has highest interest rates...
You can find the highest interest rate looking at the table in the post above. To choose between fixed deposit Vs recurring deposit, it's simple. If you have lump-sum amount go for FD and when you have regular income go for RD.
Hi Amit,
We can open RD account without having Saving account in same bank
Yes technically you can open RD account without savings account but I think bank is going to ask for linked savings account for regular auto debit and it also becomes more convenient both for the bank and the customer.
Hey amit , nice stuff.
Well I wanted to ask you about IF there is any special kind of loan available for engineers to startup their own buisness
I don't think banks would give any kind of loan without any security (except for low ticket priority sector loans/ education loan). However there would be few Government schemes which might offer loans to upcoming startups. You will need to search for it.
Which is the best bank to maximum RD rate?
Well you can check the interest rates above
Thanx Amit for useful information... Would like to know about mutual funds.
Thanks & regards
Pramod.
RD is TAX Free?
No you need to pay tax on interest received on RD. There used to be no TDS on RD and so many people take it to be tax free. Going forward Budget 2015 has proposed TDS on RD, so this advantage is gone now.
thanks a Lot Amit for the one stop and comparative concise information.
Kindly guide us about the Fate of Ratnakar Bank, which is offering the highest R.D Flat Interest rate of 9.5%? Is it something dicey since?
Thanks & Regds
Madananjay Sharma
Ratnakar Bank is a private bank and its safe to invest in its FD/RD. This is well regulated by RBI and so nothing much to worry about. The most worrisome lot is the cooperative banks!
If you are talking about cooperatives of North India could be true... But in places like Kerala and Karnataka where cooperatives are pretty strong and a lot safer than the small pigmie commercial Banks, deposits in these banks are as risky as in Commercial Banks.
May be what your are saying might be true - Some cooperative banks might be stronger. But if you look back in history co-operative banks had the maximum closures.
Amit I just want to invest fix money on monthly basis for fix time so that i used for my children education or marriige.
please sugges me what should i choose RD / SIp / simple saving or anything else
Hi sir
I m invest Rs 2000 every month in Franklin india high growth company fund . Mutual funds. Tell about fund right or wrong or choose other fund
Invest plan 5 year
Its a good fund - you can stay invested.
Its very hard to suggest in comment about investment for children marriage or education. But if you have risk appetite and your goal is more than 10 years away, you should start SIP in few good equity mutual funds. As you approach near the goal you need to redeem this and start putting that in Debt mutual fund or FD/RD.
thank you amit, it was informative.