Customers who have a current or savings account at a bank can set standing instructions to the bank for further investments. Investors must commit to a specific schedule of monthly payments for a set period. The depositor can get a lump at maturity because of the account’s flexibility, minimal monthly deposits, and low maintenance requirements.
The minimum and interest rate differs depending on the bank. Here is a recurring deposit interest rates comparison of SBI, HDFC Bank, ICICI Bank, Yes Bank, IndusInd Bank.
SBI RD interest rates
State Bank of India offers recurring deposit interest rate between 6.50% to 7% on tenures from 1 year to 10 years. The highest interest rate is offered on tenure of 2 years to less than 3 years.
HDFC Bank RD interest rates
HDFC Bank offers recurring deposit interest rates ranging from 4.50% to 7.10% for terms ranging from 6 months to 10 years for general citizen. The highest interest rate of 7.10% is available for a 15-month term.
|Period||Interest Rate||Senior Citizen Rates||Effective From|
ICICI Bank RD interest rates
ICICI Bank offers recurring deposit interest rates between 4.75% to 7.10% for tenures of 6 months to 10 years. The highest interest rate of 7.10% is offered on tenure of 15 months, 18 months, 21 and 24 months.
|Above 3 years upto 5 years||7.00%||7.50%|
|Above 5 years upto 10 years||6.90%||7.50%|
IndusInd Bank RD interest rates
IndusInd Bank offers recurring deposit interest rates ranging from 7% to 7.50% on terms ranging from 12 months to 10 years. The highest interest rate of 7.50% is available for terms of 12 months, 15 months, and 18 months, as well as 21 months and 24 months for general citizens.
|Tenure||Interest Rates p.a. (%)||Senior Citizen Rates p.a.(%)|
|3 years to below 61 month||7.25||8|
|61 month and above||7||7.75|
Yes Bank RD rates
Yes Bank offers recurring deposit interest rates ranging from 6.10% to 7.75% on terms ranging from 6 months to 10 years. The highest interest rate of 7.75% is available for terms of 18 months and 21 months.
|Period||Resident Recurring Deposit Interest Rates for < 2 Cr|
|Interest Rate||Senior Citizen Rate|
|(per annum)||(per annum)|
|3 Years < 5 Years||7.25%||8.00%|
|5 Years 1 day and above||7.00%||7.75%|
How is interest on RD calculated
The interest is compounded quarterly at most banks.
According to the Bank of Baroda website, “Interest on RD accounts is compounded quarterly, and the account holder receives a sizeable surplus of principal and interest upon maturity. In contrast to traditional investment accounts, this allows you to make regular, smaller deposits into your account of choice rather than one large one every few months.”
The interest income is taxable at the time of maturity. Banks deduct TDS tax deducted at source on the interest earned on RD investments as per prevailing Income Tax ACT.
How to open a Recurring Deposit?
An RD account can be opened in a bank’s branch or over the internet. Here are simple steps how you can open RD account online in Bank of Baroda net banking.
Step 1: Login your bank account using credentials
Step 2: On the main screen, click “Open an e-RD Account.”
Step 3: Fill in details such as bank account information, the preferred instalment amount, and the desired timeframe for the instalment debit. Include the beneficiary’s statement and the interest rate applicable.
Step 4: After confirming the maturity date, you can ensure your acceptance of the terms and conditions by clicking the box.
Step 5: Submit your application. A receipt for the RD will be emailed to the address on file, and a confirmation message will be shown.
Step 6: The predetermined sum will be deducted from the designated account.