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

Highest Interest Rate on Recurring Deposits - August 2017

Highest Interest Rate on Recurring Deposits – August 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 Ratnakar Bank offers 7.40%
  2. For 2 years The Ratnakar Bank offers 7.50%
  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 7.35% by The Ratnakar Bank
  6. The Post Office offers 5 Year Recurring Deposit Scheme offering 7.1% 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: August 1 , 2017
Banks 1 Years 2 Years 3 Years 4 Years 5 Years 5+ Years
Allahabad Bank 6.60% 6.50% 6.50% 6.50% 6.50% 6.50%
Andhra Bank 6.75% 6.50% 6.50% 6.25% 6.25% 6.25%
Axis Bank 6.75% 6.25% 6.25% 6.25% 6.25% 6.25%
Bandhan Bank 7.25% 7.25% 6.90% 6.90% 6.90% 6.50%
Bank of Baroda 6.60% 6.65% 6.50% 6.50% 6.50% 6.50%
Bank of India 6.70% 6.65% 6.65% 6.60% 6.50% 6.50%
Bank of Maharashtra 6.50% 6.25% 6.25% 6.00% 6.00% 6.00%
Canara Bank 6.75% 6.65% 6.65% 6.65% 6.65% 6.25%
Catholic Syrian Bank 6.50% 6.50% 6.75% 6.50% 6.50% 6.50%
Central Bank of India 6.50% 6.50% 6.50% 6.50% 6.50% 6.50%
Citibank 5.25% 5.25% NA NA NA NA
City Union Bank 7.10% 6.85% 6.85% 6.85% 6.85% 6.70%
Corporation Bank 6.60% 6.60% 6.60% 6.50% 6.50% 6.50%
DCB Bank 6.95% 7.05% 7.15% 7.20% 7.20% 7.15%
Dena Bank 6.80% 6.80% 6.80% 6.80% 6.80% 7.00%
Deutsche Bank 6.90% 6.90% 7.00% 7.25% 8.00% NA
Dhanalakshmi Bank 6.75% 6.75% 6.50% 6.50% 6.50% 6.50%
Federal Bank 6.70% 6.60% 6.50% 6.50% 6.50% 6.50%
HDFC Bank 6.80% 6.25% 6.00% 6.00% 6.00% 6.00%
ICICI Bank 6.75% 6.75% 6.50% 6.50% 6.50% 6.50%
IDBI Bank 6.75% 6.50% 6.25% 6.25% 6.25% 6.00%
IDFC Bank 7.00% 7.25% 7.20% 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% 7.15% 6.75% 6.75% 6.75% 6.75%
J&K Bank 6.75% 6.75% 6.75% 6.50% 6.50% 6.50%
Karnataka Bank 6.65% 6.65% 6.50% 6.50% 6.50% 6.50%
Karur Vysya Bank 6.75% 7.00% 7.00% 7.00% 7.00% 7.00%
Kotak Mahindra Bank 6.50% 6.50% 6.00% 6.00% 6.00% 6.00%
Lakshmi Vilas Bank 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Oriental Bank of Commerce 6.85% 6.85% 6.50% 6.50% 6.50% 6.50%
Post Office Recurring Deposit NA NA NA NA 7.10% NA
Punjab and Sind Bank 6.80% 6.80% 6.80% 6.80% 6.80% 6.80%
Punjab National Bank 6.75% 6.65% 6.65% 6.65% 6.65% 6.50%
Ratnakar Bank 7.40% 7.50% 7.50% 7.35% 7.35% 7.35%
Repco Bank 7.25% 7.00% 7.00% 7.00% 7.00% NA
South Indian Bank 6.75% 6.50% 6.50% 6.50% 6.50% 6.50%
Standard Charted Bank 6.90% 6.50% 6.50% 6.50% 6.50% NA
State Bank of India 6.75% 6.50% 6.25% 6.25% 6.25% 6.25%
Syndicate Bank 6.50% 6.50% 6.60% 6.60% 6.60% 6.50%
Tamilnad Mercantile Bank 7.00% 7.00% 7.00% 6.90% 6.90% 6.90%
UCO Bank 6.65% 6.55% 6.40% 6.40% 6.40% 6.30%
Union Bank of India 7.00% 6.80% 6.80% 6.80% 6.80% 6.80%
United Bank of India 6.25% 6.00% 6.00% 6.00% 6.00% 6.00%
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%

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?

90 thoughts on “Highest Interest Rate on Recurring Deposits (RD) – August 2017

  1. 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

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

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

  4. 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?

  5. mantly 5000 rd

  6. 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.

  7. April update!!!!!!!!!

  8. 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.

  9. 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.

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

  11. 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.

  12. 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.

  13. 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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