Highest Interest Rate on Recurring Deposits (RD) – April 2017

Highest Interest Rate on Recurring Deposits - April 2017

Highest Interest Rate on Recurring Deposits – April 2017

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 for General public

Recurring Deposit Interest Rates:

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

  1. For RD duration of 1 Year Repco Bank offers 8.00%
  2. For 2 years The Ratnakar Bank offers 7.65%
  3. For 3 to 4 Years the best offer is by The Ratnakar Bank offering 7.50% interest rate
  4. For 5 Years RD duration the best interest is offered at 8.00% by  Deutsche Bank
  5. For 5+ Years RD duration the best interest is offered at 7.50% by The Ratnakar Bank
  6. The Post Office offers 5 Year Recurring Deposit Scheme offering 7.2% 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.

Last Updated: April 1 , 2017
Banks 1 Years 2 Years 3 Years 4 Years 5 Years 5+ Years
Allahabad Bank 7.00% 6.75% 6.75% 6.50% 6.50% 6.50%
Andhra Bank 7.00% 7.00% 6.50% 6.50% 6.50% 6.50%
Axis Bank 7.00% 7.00% 6.75% 6.75% 6.75% 6.75%
Bandhan Bank 7.50% 7.25% 6.90% 6.90% 6.90% 6.50%
Bank of Baroda 7.00% 7.00% 6.85% 6.50% 6.50% 6.50%
Bank of India 7.00% 6.85% 6.85% 6.70% 6.70% 6.70%
Bank of Maharashtra 6.50% 6.25% 6.25% 6.00% 6.00% 6.00%
Canara Bank 6.90% 6.90% 6.90% 6.90% 6.90% 6.90%
Catholic Syrian Bank 6.50% 6.50% 6.75% 6.50% 6.50% 6.50%
Central Bank of India 7.00% 6.90% 6.90% 6.90% 6.90% 6.90%
City Union Bank 7.10% 6.85% 6.85% 6.85% 6.85% 6.70%
Corporation Bank 6.90% 6.90% 6.90% 6.80% 6.80% 6.80%
DCB Bank 7.10% 7.20% 7.25% 7.25% 7.25% 7.20%
Dena Bank 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Dhanalakshmi Bank 6.75% 6.50% 6.50% 6.50% 6.50% 6.50%
Federal Bank 6.70% 6.80% 6.50% 6.50% 6.50% 6.50%
HDFC Bank 6.90% 6.25% 6.25% 6.25% 6.25% 6.25%
ICICI Bank 6.90% 7.00% 6.75% 6.75% 6.75% 6.50%
IDBI Bank 6.90% 6.90% 6.90% 6.90% 6.90% 6.75%
IDFC Bank 7.25% 7.25% 7.25% 7.20% 7.20% 7.20%
Indian Bank 6.50% 6.25% 6.25% 6.00% 6.00% 6.00%
Indian Overseas Bank 6.75% 6.50% 6.25% 6.00% 6.00% 6.00%
Indus Ind Bank 7.15% 7.05% 6.75% 6.75% 6.75% 6.75%
J&K Bank 6.75% 6.75% 6.75% 6.75% 6.75% 6.75%
Karnataka Bank 6.75% 6.75% 6.50% 6.50% 6.50% 6.50%
Karur Vysya Bank 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Kotak Mahindra Bank 6.75% 6.25% 6.25% 6.25% 6.25% 6.00%
Lakshmi Vilas Bank 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Oriental Bank of Commerce 7.00% 6.75% 6.75% 6.50% 6.50% 6.75%
Post Office 5 Year RD NA NA NA NA 7.30% NA
Punjab and Sind Bank 7.10% 7.10% 7.00% 7.00% 7.00% 7.00%
Punjab National Bank 7.00% 6.90% 6.90% 6.90% 6.90% 6.70%
Repco Bank 8.00% 7.50% 7.25% 7.25% 7.25% NA
South Indian Bank 6.75% 6.75% 6.50% 6.50% 6.50% 6.50%
State Bank of India 6.90% 6.75% 6.75% 6.50% 6.50% 6.50%
Syndicate Bank 6.80% 6.50% 6.50% 6.50% 6.00% 6.00%
Tamilnad Mercantile Bank Ltd 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
The Ratnakar Bank 7.50% 7.65% 7.65% 7.50% 7.50% 7.50%
UCO Bank 7.00% 6.90% 6.90% 6.75% 6.75% 6.75%
Union Bank of India 7.00% 6.80% 6.80% 6.80% 6.80% 6.80%
United Bank of India 6.50% 6.25% 6.25% 6.25% 6.25% 6.25%
Vijaya Bank 6.50% 6.50% 6.50% 6.50% 6.50% 6.25%
Yes Bank 7.10% 7.10% 7.10% 7.10% 7.10% 7.10%
Citibank 5.25% 5.25% NA NA NA NA
Deutsche Bank 7.00% 7.00% 7.00% 7.25% 8.00% NA
Standard Charted Bank 7.00% 7.00% 7.00% 7.00% 7.00% NA

Source: Bank Websites

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.

Tax on Recurring Deposits:

In case of RD the interest received is added to the income and taxed at marginal tax slab.

Since June 1, 2015 banks would deduct TDS at 10% in case the interest on Recurring Deposit is more than Rs 10,000 in the financial year. This interest would be added across all branches of a bank and across all RDs for a customer to calculate the TDS.

Also Read: How to Fill Form 15G/H to avoid TDS?

101 thoughts on “Highest Interest Rate on Recurring Deposits (RD) – April 2017

  1. EmMI Rinkesh Paul says:

    Hi,
    I want to invest 10000/- month ,which bank is perfect for me.

    • You can invest in any of the above listed banks depending on your convenience and interest rate offered. You should be careful in case you deal with co-operative banks.

  2. Hi Amit:

    I am paying tax for salary. But I want to invest 5 lakhs for 5 year on a tax saving FD. After 5 years, how much I have to pay for tax from income.

    • Ideally TDS would be deducted from the interest you receive on FD every year, so it’s good practice to show interest received every year as income and pay tax on it.
      The interest received is added to your income and taxed at your tax slab.
      You can get more details and comparison of Tax Saving FDs here.

  3. Can u explain WT IS TDS 10% …? if i opened RD 1000/- for 1yrs on ICICI .. hw much will i get with interest …and wht will be TDS amount …

    • Assuming you open RD at the interest rate of 8% for 1 year. You would get Rs 530 as interest in a year. At TDS rate of 10% – Rs 53 would be deducted by bank and submitted to I-T department. So you would get Rs 477 as interest.

      However remember, in case you are in higher tax bracket, you would need to pay additional tax.

  4. Hi
    I want to invest 2000rs per month, which savings is best for me

  5. […] Also Read: Highest Interest Rate on Recurring Deposits across 44 banks […]

  6. […] Also Read: Latest Interest Rate comparison across 44 banks (updated monthly) […]

  7. Is matured RD proceeds amenable for TDS?

  8. […] Also Read: Highest Interest Rate on Recurring Deposits [comparing 41 banks] […]

  9. sir iam open rd account 5000 p m plz advice high interest bank or post office

  10. Hii
    Can I withdraw Online,my RDwhich is matured.

    • 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.

  11. Is Rd deposite in post office is taxable at final withdrawl?

    • 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.

  12. How can I invest 200 rs per day and where I can invest to get maximum compound interest within 2 years?

    The below link will satisfy all of your enquiries. Good luck for saving \U0001f44d http://apnaplan.com/highest-interest-rate-on-recurring-deposits-rd/

  13. 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

    • 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.

  14. Hi,

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

  15. I recently heard about one Pvt bank giving 12.5% ..

  16. 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

    • 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.

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