Recurring Deposit Interest Rates in India for 2023
A Fixed Deposit (FD) and Recurring Deposit (RD) are considered safe investment options, making them popular among investors with low-risk appetite.
The RD account enables you to accumulate funds by investing a fixed amount each month over a certain period. You will also accumulate interest over the invested amount based on the RD interest rate. It means that upon maturity, you receive your invested amount with accrued interest.
Read on to know recurring deposit interest rates offered by top banks, their different types, factors that affect RD interest rates, and more.
Also Read: Senior Citizen Savings Scheme Interest Rate
Recurring Deposit Interest Rates Comparison Among The Top Banks
RD interest rates in all banks typically range from 2.35% to 7% (small finance banks usually offer a higher rate of interest) per annum. Here are some of the top bank’s RD interest rates as of 2023 (tentative tenure of 10 years).
|Bank||RD Interest Rate||RD Interest Rate for Senior Citizens|
|SBI||5.45% to 5.65%||5.95% to 6.45%|
|Bank of Baroda||4.65% to 5.50%||5.8% to 6.50%|
|AU Small Finance Bank||4.25% to 7.75%||4.75% to 8.25%|
|PNB||4.50% to 5.65%||5.00% to 6.45%|
|Central Bank of India||4.65% to 6.25%||5.15% to 6.75%|
|ICICI Bank||4.25% to 6.00%||4.75% to 6.60%|
|HDFC Bank||4.25% to 6.1%||4.75% to 6.75%|
|Axis Bank||4.65% to 5.75%||4.90% to 6.50%|
|Kotak Bank||5.00% to 6.10%||5.50% to 6.60%|
|Citibank||2.75% to 6.75%||2.75% to 6.75%|
|IDBI Bank||5.70% to 5.80%||6.20% to 6.55%|
|Indian Bank||3.75% to 5.65%||4.25% to 6.15%|
|IDFC First Bank||4.50% to 6.00%||5.00% to 6.50%|
|Indian Overseas Bank||4.65% to 5.85%||5.15% to 5.70%|
|Bank of India||4.35% to 5.75%||4.85% to 6.25%|
|Canara Bank||5.90% to 7.00%||6.40% to 7.50%|
|Bank of Maharashtra||5.00% to 5.50%||5.50% to 6.00%|
|IndusInd Bank||5.50% to 6.25%||6.25% to 7.00%|
|Karnataka Bank||5.80% to 6.40%||6.30% to 6.80%|
|Union Bank of India||4.60% to 5.80%||5.10% to 6.30%|
|DBS Bank||2.50% to 6.25%||3.00% to 6.75%|
|Punjab & Sind Bank||4.50% to 5.75%||5.00% to 6.25%|
|South Indian Bank||4.60% to 6.00%||5.10% to 6.50%|
|Tamilnad Mercantile Bank||5.50% to 5.75%||6.00% to 6.25%|
|UCO Bank||5.30% to 5.60%||5.55% to 6.10%|
|Saraswat Co-operative Bank||5.65% to 5.75%||6.00% to 6.10%|
|Federal Bank||5.60% to 6.00%||6.10% to 6.65%|
|Bandhan Bank||4.50% to 5.60%||5.25% to 6.35%|
|City Union Bank||6.00% to 6.30%||6.00% to 6.75%|
|Dhanlaxmi Bank||5.60% to 6.10%||6.10% to 6.60%|
Types of RD Interest Rates
The following are the different types of recurring deposit accounts usually offered by banks.
- Indian citizens who are 18 years or older are eligible for recurring deposits. They can open an RD account with banks or post offices.
- You can choose the monthly amount to deposit each month along with the duration ranging from 6 months to 10 years.
- At the maturity of RD, you will receive a lump sum payment that includes the principal amount and accrued interest.
Recurring Deposits for Minors
- Banks also offer RD schemes for minors.
- Only parents or legal guardians can open an RD account for minors.
- This type of account usually offers the same or higher interest rates than regular RD accounts.
Senior Citizens Recurring Deposits Schemes
- Banks provide higher interest rates to senior citizens.
- Banks usually provide an additional 0.50%-0.75% annual interest over regular RD rates. However, the rate may differ from bank to bank.
NRE/NRO Recurring Deposits schemes
- NRE (Non-Resident External Account) and NRO (Non-Resident Ordinary Account) recurring deposit schemes are for NRIs (Non-Resident Indians).
- This type of account typically offers slightly lower interest rates than regular RD accounts.
- Non-resident senior citizens with NRE or NRO accounts are not eligible for additional interest rates.
Special RD Schemes
- Some banks offer recurring deposit schemes tailored to match their customers’ requirements.
- For example, ICICI bank offers iWish deposits, which are recurring deposits with extra flexibility. It allows you to start with a minimum deposit of Rs 50. However, you can choose any amount for your upcoming deposit, you can deposit it at any time, and you can deposit it more than once in the same month.
Factors That May Affect Recurring Deposit Interest Rates
The following are the main factors that influence recurring deposit interest rates.
Type of RD accounts:
RD interest rates depend on the type of account. For example, personalised RD accounts may offer you lower interest compared to normal accounts
Almost every bank offers higher interest rates to senior citizens. Banks usually provide an extra 0.50% per annum over general RD accounts. Some banks also offer higher interest rates on RD accounts for minors.
Tenure is the most significant factor which determines the RD interest rate. Depending on the banks, medium-term deposits usually yield higher interest rates. However, some banks may offer the highest interest rates on long-term deposits, while others may offer the same interest rate even for a one-year term.
Interest rates differ from bank to bank. Depending on the bank and tenure, it typically ranges from 2.35% to 7% per annum (small finance banks usually offer a higher rate of interest).
Also Read: FD Interest Rates Comparison
Recurring deposit interest depends on several factors, such as the monthly deposits, tenure and age.
The bank where you open an RD account also plays a crucial role in determining RD interest rates. Most banks offer senior citizens a higher interest rate. While some banks, small finance banks, in particular, offer higher interest rates for recurring deposit accounts for minors. No matter which bank you open your account with (except for cooperative banks), you get deposit insurance of up to ₹5 lakhs from Deposit Insurance and Credit Guarantee Corporation (DICGC).
Most banks offer interactive calculators on their official websites to calculate the final amount at maturity.
What are the factors that affect FD interest rates?
A recurring deposit interest rate depends on many factors, including the monthly deposit amount, tenure, bank, and the type of RD account.
What are the types of recurring deposits?
Banks typically offer regular RD accounts, RD accounts for minors, RD accounts for senior citizens, NRE/NRO RD accounts, and special RD schemes.
How can I open an RD account?
Depending on the bank, you may open an RD account through its website. However, some banks allow you to open an RD account instantly if you have a savings account at that bank.
You can also open an RD account at your nearest branch of a bank or post office.
Who is eligible to open a recurring deposit account?
Any Indian Citizen above 18 years of age is eligible to open a RD account. RD accounts for minors can be managed by their parents or legal guardians. NRIs are also eligible to open an RD account in India.
How is TDS on RD interest calculated?
The interest earned on RDs is also subject to a TDS of 10% when the interest earned exceeds Rs. 40,000 (Rs. 50,000 for senior citizens).
Will I incur a penalty for a delay in payment of RD instalment?
Yes, you will incur a penalty for delay in payments. However, penalties differ from bank to bank based on the extent of the delay.
How can I calculate RD interest amount?
You can visit a bank’s website as most banks offer interactive RD calculators on their official websites to calculate the total interest amount at maturity.