Recurring Deposits Interest Rates - SBI, HDFC, ICICI, Axis, All Banks
RD Interest Rates in India Jun 2017
- RD account help to inculcate habit of regular saving among the public.
- Post office recurring deposit can be opened with minimum amount of Rs 10.
- Generally rate of interest on recurring account is same as that of FDs of the same tenure.
- Deposit period ranges from: Minimum- 6 months; Maximum- 10 years.
- Minors can also open RD account under guardianship of parents.
- Usually, Senior citizens are eligible for higher rate of interest, usually 0.5% more than the other investors.
- The interest on RD is compounded quarterly.
- Partial and midterm withdrawals are not allowed. Premature closure with penalty is allowed.
- Loan against recurring deposit is allowed.
Recurring Deposit Interest Rates Comparison, Jun 2017, Best rates
|Bank||General Rates||Senior Citizen Rates|
|SBI||6.50% - 6.95%||7.00% - 7.45%||Explore More Calculator|
|HDFC Bank||5.75% - 6.90%||6.25% - 7.40%||Explore More Calculator|
|ICICI Bank||6.25% - 7.10%||6.75% - 7.60%||Explore More Calculator|
|Axis Bank||6.50% - 7.00%||7.00% - 7.50%||Explore More Calculator|
|Kotak Bank||6.25% - 6.75%||6.75% - 7.25%||Explore More Calculator|
|IDFC Bank||6.75% - 7.25%||0.00% - 0.00%||Explore More Calculator|
|Bank of Baroda||6.50% - 7.00%||6.50% - 7.00%||Explore More Calculator|
|Corporation Bank||7.00% - 7.10%||7.50% - 7.60%||Explore More Calculator|
|IDBI Bank||7.00% - 7.15%||7.50% - 7.65%||Explore More Calculator|
|Indian Bank||5.25% - 6.50%||5.75% - 7.00%||Explore More Calculator|
|Indian Overseas Bank||5.75% - 6.75%||6.25% - 7.25%||Explore More Calculator|
|PNB||6.70% - 7.00%||7.20% - 7.50%||Explore More Calculator|
|SBBJ||6.50% - 7.00%||7.00% - 7.50%||Explore More Calculator|
|Syndicate Bank||6.00% - 6.80%||6.50% - 7.30%||Explore More Calculator|
|Allahabad Bank||6.50% - 7.00%||0.00% - 0.00%||Explore More Calculator|
|Andhra Bank||6.25% - 7.00%||6.75% - 7.50%||Explore More Calculator|
|Bank of India||6.75% - 7.00%||7.25% - 7.50%||Explore More Calculator|
|Bank of Maharashtra||6.50% - 6.80%||7.00% - 7.30%||Explore More Calculator|
|Canara Bank||7.00% - 7.35%||7.50% - 7.85%||Explore More Calculator|
|Central Bank of India||7.00% - 7.15%||7.50% - 7.65%||Explore More Calculator|
|Dena Bank||6.50% - 7.25%||7.00% - 7.75%||Explore More Calculator|
|Punjab and Sind Bank||6.60% - 7.10%||7.10% - 7.60%||Explore More Calculator|
|State Bank of Hyderabad||6.50% - 6.95%||7.00% - 7.45%||Explore More Calculator|
|State Bank of Mysore||6.50% - 6.95%||7.00% - 7.45%||Explore More Calculator|
|State Bank of Travancore||6.50% - 6.95%||7.00% - 7.45%||Explore More Calculator|
|UCO Bank||6.75% - 7.00%||0.00% - 0.00%||Explore More Calculator|
|Union Bank of India||7.00% - 7.25%||7.50% - 7.75%||Explore More Calculator|
|South Indian Bank||4.00% - 7.00%||4.50% - 7.50%||Explore More Calculator|
|DBS Bank||5.00% - 8.00%||5.00% - 8.00%||Explore More Calculator|
|Tamilnad Mercantile Bank||5.00% - 7.00%||5.00% - 7.50%||Explore More Calculator|
|Karur Vysya Bank||7.00% - 7.00%||7.00% - 7.50%||Explore More Calculator|
|RBL Bank||7.00% - 7.85%||7.50% - 8.35%||Explore More Calculator|
RD is a term deposit offered by banks that permits you to make regular investments. You can invest a particular amount every month for a specified period of time. Interest is compounded quarterly and the rate of interest offered remains unchanged during the tenure. The tenure of RD ranges from 6 months to 10 years. On maturity, you will receive your principal amount and interest income.
Recurring Deposit Formula
Interest on RD is calculated quarterly by banks. Interest is compounded quarterly by using the following formula:M = R[(1+i)^n-1]/(1-(1+i)^(-1/3) )
M = Maturity Value
R = Monthly Installment
n = Number of quarters
I = Rate of interest/400
Tax exemption on Recurring Deposits
Earlier no tax was deducted on recurring deposit. With effect to 1st June, 2015, recurring deposits are subject to TDS (tax deducted at source) as per the income tax laws. TDS on RD would be deducted at the rate of 10%. However, no TDS would be deducted if the interest income earned does not exceed Rs. 10,000 in a financial year.
Tax is to be paid as per applicable slabs at the time of filing income tax return. If you have submitted Form 15G (in case of normal citizens) and 15H (in case of senior citizen) in the bank, your TDS will not be deducted (in case your total taxable income doesn’t come under tax slab).
RD for Senior Citizen
Senior citizens can also avail the RD facility. The rate of interest is slightly higher than the normal deposits.Generally banks offer 0.25 percent to 0.75 percent more interest than normal RDs. Indian residents and NRIs both can open RD account.
Your age must be above 60 years on the date of opening the RD account.
Loan against recurring deposit
You can avail loan against your RD account by using your deposited amount as collateral. Generally banks provide 75 to 90 percent of the deposited amount as loan. However, the loan to value varies from bank to bank. For example- SBI gives 90% of the deposited amount as loan whereas Bank of Baroda gives 95% of deposited amount as loan.
Post office Recurring Deposit (PORD)
Post office recurring deposits is the systematic saving plan that offers guaranteed returns.
The objective of PORD account is to provide assured return, compounded quarterly or monthly over a period of 60 months. However, It doesn’t offer any tax incentives, but it is preferred by small savers due to government backing.
It does not require any commercial rating because it is offered by Government of India.
Penalty is charged in case of premature closing of account.
There is no risk associated with this investment and it is completely risk-free.
You can open the account in any post office.
Following documents are needed to open PORD Account:
- An account-opening form
- Two passport size photographs
- Address and identity proof such as the Aadhaar card, passport, PAN (permanent account number) card or declaration in Form 60 or 61 as per the Income Tax Act, 1961, driving license, voter’s identity card or ration card.
- Carry original identity proof for verification at the time of account opening.
- Choose a nominee and get a witness signature to complete the formalities and get started.
- You need a pay-in slip with the initial account-opening sum to be credited to your account.
- Payment can be made in cash, by cheque, or by instructing the bank to transfer money to the PORD.
Frequently asked questions on Recurring deposits
Indian residents and HUF (Hindu Undivided Families) can open RD account. NRIs can also open the RD account through NRO and NRE accounts.
Banks provide RD scheme for minors as well, under the guardianship of parents to supervise their finances.Duration of Recurring Deposits
RD can be opened for minimum 6 months which can further be increased in multiples of 3 months that can go up to maximum tenure of 10 years. However, minimum tenure can be different for different banks. For example- minimum tenure for RD in SBI is 12 months whereas 6 months in ICICI Bank.Premature Withdrawal of RD
The amount can only be withdrawn on maturity. In case of emergency you can break your RD before maturity, but after that your account will be closed. The bank may deduct 1 or 2 percent penalty from the interest accrued on your RD amount for period the amount remained with the bank.
When you request for premature withdrawal, bank will keep your RD amount for one month as lock in period. If you request your amount before lock in period, bank would not pay any interest on your amount.Partial withdrawal of RD
Partial withdrawal of recurring deposit is not allowed.Maturity of RD account
On maturity of your RD account, you can ask bank to transfer the amount directly into your saving account. You can also invest your RD amount in fixed deposits after maturity.Nomination in RD account
- Nomination facility is available in recurring deposits. Whether you open it in single name or joint name, one nominee per account is permissible. You should ensure that the nomination is followed as per RBI rules.
- You can change the nominee through declaration in appropriate form.
NRIs can invest in recurring deposits via two investment options:
NRE Recurring Deposits Accounts: In this, the deposit installments have to be credited from NRE (non- resident external account) account. The interest income is tax free in India. the maturity amount can easily be taken to home country.
NRO Recurring Deposits Accounts: In this, the deposit installments have to be credited either from NRE account or NRO (non- resident ordinary account) account. The interest from NRO RDs is taxable at the rate of 30%, plus the additional CESS. The amount can be taken to home country but it is subjected to certain requisites.