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

Highest Interest Rate on Recurring Deposits - March 2017

Highest Interest Rate on Recurring Deposits – March 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 & Bandhan 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 7.3% 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: March 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 7.70% 7.50% 7.50% 7.00% 7.00% 7.00%
Bank of Baroda 7.00% 7.00% 6.85% 6.50% 6.50% 6.50%
Bank of India 7.00% 7.00% 7.00% 6.90% 6.90% 6.90%
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 6.75% 6.50% 6.50% 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% 6.90% 6.90% 6.80% 6.80%
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 Bikaner and Jaipur 7.25% 7.25% 7.25% 6.50% 6.50% 6.50%
State Bank of Hyderabad 6.90% 6.95% 6.85% 6.50% 6.50% 6.50%
State Bank of India 6.90% 6.75% 6.75% 6.50% 6.50% 6.50%
State Bank of Mysore 6.90% 6.95% 6.85% 6.50% 6.50% 6.50%
State Bank of Patiala 6.90% 6.95% 6.85% 6.50% 6.50% 6.50%
State Bank of Travancore 6.90% 6.95% 6.85% 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?

99 thoughts on “Highest Interest Rate on Recurring Deposits (RD) – March 2017

  1. 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.

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

  3. 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.

  4. 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.

  5. 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.

  6. Amit , how safe is Deutsche Bank

    • In general all banks are safe as they are very closely regulated. Co-operative banks are the riskiest of the lot mainly due to mismanagement and political interference. Even government owned banks have poor lending practice as the recent NPAs show but the depositors need not worry as in worst case government would print money and pay back depositors. Also government would not let big private banks to fail as it would have very adverse impact on economy and other banks. As far as foreign banks are concerned I would say they are safer than co-operative banks and riskier than big private banks. Deutsche is in this category!

  7. WHICH BANK GIVE ONE YEAR RD FOR Rs.50/MONTH

  8. really you provide a great list and i appreciate you from bottom of my heart.

  9. Can I open an RD for 9 months?

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

  11. Deepak Panchal says:

    can you provide goverment sector bank list

  12. can you provide goverment sector bank list

  13. could we invest in Ratnakar

    • Yes there is nothing wrong in Ratnakar bank, its a small private sector bank. Also if you are worried you can limit your exposure to Rs 1 lakh as that amount is insured against default

  14. State bank of Mysore is not in the list?

  15. Bandhan bank is not co operative bank from wb.

  16. Awesome List!

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