Highest Recurring Deposit Interest Rates (RD) ★ June 2021

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.

Recurring Deposit Features

  • Most banks offer RDs for tenure of 6 months to 10 Years
  • The tenure of RD can be in multiple of 3 months
  • The amount of instalment and number of instalment cannot be changed after opening of the account
  • The interest on RD compounds quarterly
  • In most cases the RD interest rate is similar to Fixed Deposits offered by Banks for similar tenures. However some banks like Bank of India gives 0.5% extra interest rate for RD as compared to FD for similar tenure
  • The minimum deposit amount can be as low as Rs 100 per month, though some banks may have higher limit
  • There can be penalty for missing even one instalment.
  • In case you miss multiple instalments the RD can be closed and amount returned to you
  • Most banks offer Loan/Overdraft against the amount available in Recurring Deposit. The interest is generally 0.5% to 1% more than that offered to RD.
  • There are penalty clauses for pre-mature withdrawal similar to Fixed Deposits

Best Recurring Deposit Interest Rates

Following are the highest Interest rates on Recurring Deposits based on duration:

Best Recurring Deposit Interest Rates from Small Financial Banks

  • For RD duration of 1 Year Suryoday Small Finance Bank, Utkarsh Small Finance Bank & North East Small Finance Bank offers 6.75%
  • For 2 years Suryoday Small Finance Bank offers 7.00%
  • For 3 to 4 Years the best interest rate offer is by Suryoday Small Finance Bank at 7.10% 
  • For 5 Years RD duration the best interest is offered at 7.25% by Suryoday Small Finance Bank
  • For 5+ Years RD duration the best interest is offered at 6.75% by Utkarsh Small Finance Bank

Best Recurring Deposit Interest Rates from Traditional Banks

  • For RD duration of 1 Year Indus Ind Bank offers 6.50%
  • For 2 years Indus Ind Bank offers 6.50%
  • For 3 to 4 Years the best interest rate offer is by Yes Bank and DCB Bank at 6.50% 
  • For 5 Years RD duration the best interest is offered at 6.75% by Yes Bank and DCB Bank
  • For 5+ Years RD duration the best interest is offered at 6.75% by Yes Bank
  • The Post Office offers 5 Year Recurring Deposit Scheme offering 5.80% interest rate.

Get Highest Fixed Deposit Interest Rates

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.

BankType of Bank1 Year2 Years3 years4 Years5 Years5+ years
AU Small Finance Bank Small Bank6.35%6.25%6.50%6.25%6.25%6.50%
Axis BankPrivate5.15%5.25%5.40%5.40%5.75%5.75%
Bandhan BankPrivate5.75%5.75%5.50%5.50%5.50%5.50%
Bank of BarodaPost Office4.90%5.00%5.10%5.25%5.25%5.25%
Bank of IndiaGovernment5.25%5.30%5.30%5.30%5.30%5.30%
Bank of MaharashtraGovernment4.90%4.90%4.90%4.90%4.90%4.90%
Canara BankGovernment5.20%5.40%5.50%5.50%5.50%5.50%
Capital Small Finance Bank Small Bank6.00%6.00%6.00%6.00%6.00%6.00%
Catholic Syrian BankPrivate5.00%5.00%5.00%5.25%5.25%5.75%
Central Bank of IndiaGovernment4.90%5.00%5.00%5.00%5.10%5.10%
CitibankForeign2.75%3.00%xxxx
City Union BankPrivate5.00%5.50%5.50%5.50%5.50%5.25%
DCB BankPrivate5.80%6.00%6.50%6.50%6.50%6.50%
Deutsche BankForeign4.00%4.25%4.50%5.00%6.25%x
Dhanalakshmi BankPrivate5.25%5.25%5.40%5.50%5.50%5.60%
Digibank by DBSForeign4.25%4.50%5.50%5.50%5.50%5.50%
Equitas Small Finance Banksmall Bank6.50%6.65%6.65%6.40%6.40%6.65%
ESAF Small Finance Bank Small Bank6.50%6.50%6.25%6.00%6.00%5.50%
Federal BankPrivate5.10%5.35%5.35%5.35%5.50%5.50%
Fincare Small Finance Bank Small Bankxxxxxx
HDFC BankPrivate4.90%4.90%5.15%5.30%5.30%5.50%
ICICI BankPrivate4.90%5.00%5.15%5.35%5.35%5.50%
IDBI BankPrivate4.90%5.00%5.25%5.25%5.25%5.25%
IDFC First BankPrivate5.75%6.00%6.00%6.00%6.00%5.25%
Indian BankGovernment5.00%5.10%5.25%5.25%5.25%5.15%
Indian Overseas BankGovernment5.20%5.25%5.25%5.25%5.25%5.25%
Indus Ind BankPrivate6.50%6.50%6.50%6.50%6.50%6.25%
J&K BankGovernment5.10%5.20%5.30%5.30%5.30%5.30%
Jana Small Finance BankSmall Bank7.00%7.00%7.25%7.25%7.25%6.50%
Karnataka BankPrivate5.30%5.55%5.55%5.55%5.55%5.70%
Karur Vysya BankPrivate5.50%5.50%5.65%5.65%5.75%5.75%
Kotak Mahindra BankPrivate4.50%5.00%5.10%5.25%5.30%5.30%
Nainital BankPrivate5.25%5.35%5.35%5.35%5.35%5.35%
North East Small Finance BankSmall Bank6.75%6.75%6.75%6.50%6.50%6.25%
Post Office 5 Year RDPost Officexxxx5.80%x
Punjab and Sind BankGovernment5.15%5.15%5.30%5.30%5.30%5.30%
Punjab National BankGovernment5.10%5.10%5.25%5.25%5.25%5.25%
Ratnakar BankPrivate6.10%6.10%6.30%6.30%6.30%6.00%
South Indian BankPrivate5.40%5.40%5.50%5.50%5.65%5.50%
Standard Charted BankForeign5.30%5.40%xxxx
State Bank of IndiaGovernment4.40%5.10%5.30%5.30%5.30%5.40%
Suryoday Small Finance Bank Small Bank6.75%7.00%7.10%7.10%7.25%6.50%
Tamilnad Mercantile BankPrivate5.75%5.75%5.65%5.50%5.50%5.50%
UCO BankGovernment4.90%5.00%5.00%5.00%5.00%5.00%
Ujjivan Small Finance BankSmall Bank6.50%6.75%6.75%6.75%6.75%5.80%
Union Bank of IndiaGovernment5.30%5.30%5.50%5.55%5.55%5.60%
Utkarsh Small Finance BankSmall Bank6.75%6.75%6.75%6.75%6.75%6.75%
Yes BankPrivate6.00%6.25%6.50%6.50%6.75%6.75%
Best Recurring Deposit Interest Rates – June 2021

Disclaimer: The Recurring Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your RD.

Should you Invest in Gold?

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?

Calculate RD Interest

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

Helpful Posts on Recurring Deposits

Who should open Recurring Deposit Account?

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 about Hidden Charges in Banks?

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?

Recurring Deposit or Fixed Deposit?

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:

  • Both are offered by all banks
  • the interest rates are similar or close
  • the tax on interest earned is same for both RD & FD. Also TDS is applicable on both the cases.

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.

Recurring Deposit Interest Rates
Recurring Deposit Interest Rates

Tax on Recurring Deposit Interest Rates

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.

Additional Tax Exemption for Senior Citizens on Interest Income

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.

Recurring Deposit Interest Rates FAQs

✅Which is the best recurring deposit scheme in India?

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.

✅What is the top Recurring Deposit Interest Rates for 1 to 2 years in banks?

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%.

✅What is the top Recurring Deposit Interest Rates for 5 years in banks?

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

✅What is the maximum tenure of bank recurring deposits?

Most banks offer RD for 6 months to 10 years.

✅Are Bank Recurring Deposit safe?

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?

✅How is interest on Recurring Deposit taxed?

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.

✅Can I get loan on my Recurring deposit?

Yes most banks offer loans up to 90% to 95% of recurring deposit balance.

97 thoughts on “Highest Recurring Deposit Interest Rates (RD) ★ June 2021”

    1. When you open your RD, you are asked to choose if you want to invest the maturity amount back automatically or want to credit the maturity amount to the linked saving account. On maturity Rd will do what you had chosen then.

      The good thing is you can close your RD prematurely mid-way online.

    1. There is no TDS on Post office Recurring Deposit. But if your income falls in taxable range you need to pay taxes on the interest earned on RD.

  1. Hi Amit,
    Are these listed banks reliable for investing. There are some banks which offer attractive rates but I have’nt heard their names before like The Ratnakar Bank

    1. The interest rates offered are generally lower by bigger banks and higher by smaller banks. As The Ratnakar Bank is concerned it’s small private bank and is not listed. Also as it’s small bank the branches and so the customer reach is limited – so relatively lesser known. It’s safer than co-operative banks but not as safe as larger private banks like HDFC, ICICI or Government Banks like SBI.

      You also might be aware that deposit up to Rs 1 Lakh is insured and so there is no risk up to that amount.

  2. Saleesh Satheeshchandran

    Hi,

    I think you should also include the recurring deposit scheme of India Postal Department. Just for comparison.

  3. Hi Amit,

    As per the chart shared over here does Ratnakar Bank is really above all the banks providing higher interest rate on RD’s.

    Are they always on the top of every bank on every month/year in terms of Interest rate.

    Thanks

    1. Yes for most of the months I have compared Ratnakar Bank is among the top in terms of interest rate offered on fixed/recurring deposits. It’s among the smaller private banks and lower reach relatively due to less branches and hence have to offer more to compete.

      Also Tamilnad Mercantile Bank, DCB Bank, Dhanalakshmi Bank and Lakshmi Vilas Bank – all smaller private banks are among the banks offering higher interest rate on fixed/recurring deposits.

  4. Incorrect Rates mentioned for HDFC Bank for the Month of Sept 2015. Please don’t misguide People. Check HDFC website for further clarification

    1. 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.

  5. 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…

    1. 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.

    1. 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.

  6. 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

    1. 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.

    1. 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.

  7. Madananjay Sharma

    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

    1. 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!

      1. 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.

        1. 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.

  8. 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

    1. 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.

    2. 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

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