Highest Interest Rate on Recurring Deposits – December 2016
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:
- For RD duration of 1 Year Bandhan Bank and Repco Bank offers 8.00%
- For 2 years IDFC Bank and Repco Bank offers 8.00%
- For 3 to 4 Years the best offer is by The Ratnakar Bank offering 7.70% & 7.85% interest rate respectively
- For 5 Years RD duration the best interest is offered at 7.75% by Repco Bank and Deutsche Bank
- For 5+ Years RD duration the best interest is offered at 7.70% by The Ratnakar Bank
- The Post Office offers 5 Year Recurring Deposit Scheme offering 7.3% interest rate.
The table below gives the Interest Rates sorted by Bank Name. The best interest rates for all duration have been highlighted.
| 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 | 8.00% | 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 | 6.75% | 6.75% | 6.75% | 6.50% | 6.50% | 6.50% |
| Canara Bank | 7.10% | 7.25% | 7.35% | 7.35% | 7.00% | 7.00% |
| Catholic Syrian Bank | 7.15% | 7.25% | 7.15% | 7.15% | 7.15% | 7.10% |
| 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 | 7.10% | 7.10% | 7.10% | 7.00% | 7.00% | 7.00% |
| DCB Bank | 7.20% | 7.35% | 7.45% | 7.50% | 7.50% | 7.50% |
| Dena Bank | 7.00% | 7.25% | 7.25% | 7.25% | 7.25% | 7.00% |
| Dhanalakshmi Bank | 7.25% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% |
| Federal Bank | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% |
| HDFC Bank | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 6.75% |
| ICICI Bank | 7.25% | 7.25% | 7.25% | 7.25% | 7.25% | 7.25% |
| IDBI Bank | 7.15% | 7.15% | 7.15% | 7.15% | 7.15% | 7.00% |
| IDFC Bank | 7.75% | 8.00% | 7.75% | 7.50% | 7.50% | 7.50% |
| 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% | 7.00% | 7.00% | 7.00% | 7.00% |
| J&K Bank | 7.25% | 7.25% | 7.25% | 7.10% | 7.10% | 7.00% |
| Karnataka Bank | 7.25% | 7.25% | 7.00% | 7.00% | 7.00% | 7.00% |
| 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% | 6.25% |
| 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% | 8.00% | 7.75% | 7.75% | 7.75% | NA |
| South Indian Bank | 7.15% | 7.10% | 7.10% | 7.10% | 7.10% | 7.10% |
| 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% | 6.95% | 6.85% | 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 | 7.30% | 7.00% | 6.75% | 6.75% | 6.75% | 6.50% |
| Tamilnad Mercantile Bank Ltd | 7.15% | 7.10% | 7.10% | 7.00% | 7.00% | 7.00% |
| The Ratnakar Bank | 7.75% | 7.85% | 7.85% | 7.70% | 7.70% | 7.70% |
| UCO Bank | 7.00% | 6.90% | 6.90% | 6.75% | 6.75% | 6.75% |
| Union Bank of India | 7.25% | 7.25% | 7.25% | 7.25% | 7.25% | 7.25% |
| United Bank of India | 6.75% | 6.75% | 6.50% | 6.50% | 6.50% | 6.50% |
| 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 | 6.00% | 6.25% | NA | NA | NA | NA |
| Deutsche Bank | 6.00% | 7.00% | 7.00% | 7.00% | 7.75% | 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.
