Highest Interest Rate on Recurring Deposits (RD) – February 2020

Recurring deposits (RD) with banks are one of the most popular investment options for people with regular income. RD enables to deposit fixed amount every month for a pre-defined period which earns interest similar to Fixed Deposits (FD).

You might want to bookmark this page as the RD interest rates would be updated every month which would help you in better decision making.

All about Recurring Deposits:

  • 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 installment and number of installment cannot be changed after opening of the account
  • The interest on RD compounds quarterly
  • In most cases the interest rate on RD 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 installment.
  • In case you miss multiple installments 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

Click for Best Interest Rate on FDs

Recurring Deposit Interest Rates:

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

  1. For RD duration of 1 Year Lakshmi Vilas Bank offers 7.50%
  2. For 2 years Lakshmi Vilas Bank offers 7.50%
  3. For 3 to 4 Years the best interest rate offer is by DCB Bank at 7.70% 
  4. For 5 Years RD duration the best interest is offered at 7.75% by  Deutsche Bank
  5. For 5+ Years RD duration the best interest is offered at 7.35% by Ratnakar Bank
  6. The Post Office offers 5 Year Recurring Deposit Scheme offering 7.20% interest rate.

Click for Best Tax Saving FDs

The table below gives the Interest Rates sorted by Bank Name. The best interest rates for all duration have been highlighted.

Banks1 Years2 Years3 Years4 Years5 Years5+ Years
Allahabad Bank6.75%6.60%6.50%6.50%6.50%6.50%
Andhra Bank6.00%6.00%6.10%6.10%6.10%6.10%
Axis Bank6.55%6.50%6.50%6.50%6.50%6.50%
Bandhan Bank6.95%6.95%6.95%6.75%6.75%6.75%
Bank of Baroda6.10%6.10%6.10%6.25%6.25%6.10%
Bank of India6.40%6.25%6.25%6.25%6.25%6.25%
Bank of Maharashtra6.00%6.00%5.75%5.50%5.50%5.50%
Canara Bank6.30%6.00%6.25%6.25%6.25%6.25%
Catholic Syrian Bank6.50%6.25%6.25%6.25%6.25%6.25%
Central Bank of India6.25%6.20%6.20%6.20%6.20%6.20%
City Union Bank6.60%6.35%6.35%6.35%6.35%6.30%
Corporation Bank6.50%6.40%6.35%6.35%6.35%6.35%
DCB Bank7.25%7.40%7.70%7.50%7.50%7.25%
Deutsche Bank7.00%7.00%7.25%7.50%7.75%x
Dhanalakshmi Bank6.90%6.90%6.50%6.50%6.50%6.50%
Digibank by DBS6.50%6.25%6.50%6.50%6.50%6.50%
Federal Bank6.50%6.50%6.50%6.50%6.50%6.50%
HDFC Bank6.30%6.40%6.40%6.30%6.30%6.30%
ICICI Bank6.30%6.30%6.40%6.40%6.40%6.40%
IDBI Bank6.40%6.35%6.25%6.25%6.25%6.25%
IDFC First Bank7.25%7.25%7.25%7.20%7.20%7.20%
Indian Bank6.30%6.30%6.25%6.25%6.25%6.25%
Indian Overseas Bank6.25%6.35%6.25%6.25%6.25%6.25%
Indus Ind Bank6.65%6.75%6.75%6.75%6.75%6.65%
J&K Bank6.25%6.30%6.30%6.25%6.00%6.00%
Karnataka Bank6.50%6.50%6.40%6.40%6.40%6.30%
Karur Vysya Bank6.35%6.45%6.45%6.45%6.45%6.45%
Kotak Mahindra Bank6.10%6.00%6.00%6.00%6.00%5.90%
Lakshmi Vilas Bank7.50%7.50%7.50%7.50%7.25%7.25%
Oriental Bank of Commerce6.25%6.25%6.25%6.25%6.25%6.25%
Post Office 5 Year RDxxxx7.20%x
Punjab and Sind Bank6.45%6.45%6.45%6.45%6.45%6.45%
Punjab National Bank6.30%6.30%6.25%6.25%6.25%6.30%
Ratnakar Bank7.40%7.45%7.45%7.20%7.35%7.35%
South Indian Bank6.55%6.70%6.50%6.50%6.50%6.50%
Standard Charted Bank6.50%6.60%xxxx
State Bank of India6.00%6.00%6.00%6.00%6.00%6.00%
Syndicate Bank6.30%6.30%6.25%6.25%6.25%6.25%
Tamilnad Mercantile Bank6.60%6.75%6.75%6.60%6.60%6.60%
UCO Bank6.30%6.30%6.30%6.25%6.25%6.25%
Union Bank of India6.30%6.30%6.30%6.30%6.30%6.30%
United Bank of India6.50%6.25%6.25%6.00%6.00%6.00%
Yes Bank7.25%7.25%7.25%7.25%7.25%7.25%

Last Updated: February 8, 2020
Source: Bank Websites

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

Who should open Recurring Deposit?

Recurring Deposit suits people with regular income and who want to accumulate a fixed amount for certain time frame.

It’s also for people who do not have lump sum amount to take advantage of high interest rates. Those can open a long term RD which offers same interest rate as FD and keep on depositing money regularly. But if you need to put a lump-sum amount use fixed deposit.

Highest Interest Rate on Recurring Deposits - February 2020

Highest Interest Rate on Recurring Deposits – February 2020

Tax on Recurring Deposits:

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% 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.

96 thoughts on “Highest Interest Rate on Recurring Deposits (RD) – February 2020

  1. Choudhari D says:

    BY mistake i have given form no 15-H to the bank against my FDA interest for the year 2018-19, but on other investments in SCSS , parked money with private parties i have not given 15H for the same FY 2018-19 . Any complication can be anticipated for giving 15H for the bank.

  2. Biswamitra pradhan says:

    Am a normal guy am just earn 15000 every month how I invest my money on mutual fund

  3. Can you please make a similar list on the banks providing best interest rates on Recurring Deposits for NRIs

  4. I had a RD AC with Icici bank for 10 years when I requested the bank to close my Sb AC they by mistake closed my RD also
    Now what can I do to get into that RD again as the preasent interest is low

  5. What is the best way to save money monthly for a period less than 6 months?

  6. Is interest on post office Monthly income scheme fixed throughout the tenure? Will it be revised whenever government changes interest rate on MIS

  7. Hi, once we open the RD with the bank, is the interest rate of the RD is same throughout the tenure? Or will it change during tenure whenever the bank changes RD rates?

  8. mantly 5000 rd

  9. 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.

  10. April update!!!!!!!!!

  11. 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.

  12. 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.

  13. Is the interest rate on RD for vijaya bank compunded quaterly?

  14. 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.

  15. Rahul Nayak says:

    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.

  16. 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.

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