This post covers SBI Recurring Deposit Interest Rates, features, maturity amount along with other details. Recurring Deposit is a good way to accumulate money for any goal in safe and consistent manner. You deposit a fixed amount every month and at the end of it – on maturity you get your principal and accumulated interest.
SBI Recurring Deposit Interest Rates has been last revised on 8th January 2021. General Public can get 3.90% – 5.40% while senior citizens get 4.40% – 6.20% depending on the tenure of deposit. The table below gives the details.
The table below shows SBI Recurring Deposit Interest Rates & the maturity value for Rs 1,000 monthly deposit for general public and senior citizens for 1 to 10 years.
The interest on SBI Recurring Deposit is compounded quarterly and is computed using the formula below.
M=R[(1+i) (n-1)]/1-(1+i)(-1/3))
Where, M = Maturity value
R = Monthly Instalment [60 for Post office RD]
N = number of quarters (tenure) [20 for Post office RD]
i = Rate of interest/400
SBI Recurring Deposit suits someone with consistent regular income (like salary) and would like to accumulate certain amount for a goal without taking much investment risk. An example could be if you want to buy car in next 2 years, you can easily open a RD account with any leading bank and start saving. If you deposit Rs 5,000 every month for 2 years at 7%, you would get about Rs 1,29,000 at maturity. This would be good for downpayment of the car.
It’s also for someone who may not have lump sum amount available for fixed deposit but would like to lock prevailing higher interest rate for long period of time. An example situation is – In March 2013 SBI was offering 9% interest rate on their recurring deposits for 10 years. I had opened a RD with Rs 5,000 just to lock a high interest rate for 10 years. On maturity I would get about Rs 9.7 lakhs – which is good accumulated amount. As of today SBI is offering 5.4%. So I have a good investment. It’s always good idea to lock when interest rate cycle reverses and it goes high.
Whenever a depositor fails to pay the instalment on due date for three consecutive months a service charge of Rs 10/- is applicable. Penalty in case of delay in payment of instalment of RD of 5 years or less shall be Rs 1.50 for every Rs 100 per month and Rs 2.00 for every Rs. 100 per month for the account on more than 5 years. For example, if you deposited Rs 1,000 every month in SBI RD for less than 5 years maturity – If you miss payment for 1 month, you will need to deposit that instalment next month with Rs 15 as penalty (1.5 * 1000/100). If the same RD was for more than 5 years tenure, your fine would be Rs 20.
In case there is no instalment payment for six consecutive months, the SBI recurring deposit account would be closed and the available balance would be paid back to the linked account.
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View Comments
Hi Amit,
I think senior citizens get additional 0.5% interest rate and there is also TDS applicable on recurring deposits (RD Accounts).
Hi. How safe is the FD for 5 yrs with Deutsche Bank
go ahead its safe
which bank is the best for rd
Here is the link to Highest Interest Rate on Recurring Deposits. Take your pick according to tenure of investment.
I want to deposit 2lakh for 15 yrs, which is best bank FD or any other policy.
Thanks
Sir,
I am to retire from Govt. service in coming July,16. Can you suggest me the best way to put about Rs.10 lakh so that I may get a steady monthly return. I am not interested in Post Office MIS , I can afford to take some amount of risk.
Regards,
Chandan
A few days back I did a post on 13 Investments to Generate Regular Income. It would be helpful for choosing the right investment for you. Let me know in case of further queries.
Sir, is there No TDS (Tax deduction at source) on interest income of RD ?
Budget 2015 had introduced TDS on Recurring deposits too.
I have open a rd account of 5000/pm for 5years. If i would like to close the rd account before maturity on third month of its opening. Then what will be tbe principal amount of the deposited money and what amount will be deducted from the principal amount.
The penalty on premature withdrawal for recurring deposit would ary from bank to bank. In most cases there would be no deduction from principal but you would get lower interest.
I am looking for flexible RD option for one year can you please tell me which plan should i go for
Sir, I have recurring deposit in SBI. Can I deduct it from Income Tax for the FY 2015-2016
Recurring deposit are not eligible for tax benefit
Sir I have deposit 10,000 every month my rd account is three years how much back money my maturity time
I cannot tell you the maturity amount until you disclose the interest rate. Assuming investment at 8%, you would get Rs 40,7728 on maturity.