Best Recurring Deposit (RD) Interest Rates – Nov-2019

One of the safest way to save every month is investing in recurring deposits. You might have just started your career. You might be a low risk investor. You might not want to take equity market risks. Whoever you are, but if you are looking to save money every month, you can invest in recurring deposit (RD) every month. Which is the best Banks offering highest recurring deposit rates? Which are the best recurring deposit rates (RD) in India now?

Also Read: Best FD Interest Rates in India

What is Recurring Deposit?


If you are already familiar, you can skip this section.

Recurring deposit is like SIP in mutual fund. You invest a small amount in the bank every month and earn a fixed interest rate for the tenure of the investment. The recurring deposit rate is generally constant from the beginning of the RD to the maturity date.

Features of Recurring Deposits (RD)


You can open recurring deposits as low as Rs 10 per month.

You can open recurring deposit account for minimum of 6 months and maximum of 10 years. Banks do not offer RD beyond 10 years.

You can get fixed interest rate which would be calculated on the pro – rota basis of the amount invested during the tenure.

Banks allow pre-mature withdrawal, however they would charge you penalty or interest rate would be reduced.

Interest rates are ranging between 5% to 7.85% per annum depending on the bank which you would choose.

Benefits of Recurring Deposits


Recurring deposits provide a way to save money every month for the tenure chosen.

If you want to break your recurring deposit, banks would provide penalty. You would be forced to keep it and adjust your life style spending. This way, you are actually saving higher.

Recurring deposits provide interest rates upto 7.85% which can multiply your money.

RD can be used as good investment option to achieve any short term goals like paying kids school education, domestic vacation, purchasing of electronic gadgets etc.,

Best Recurring Deposit (RD) interest rates for 1 year Tenure


Bank1 Year
RBL Bank7.60
Lakshmi Vilas Bank7.50
Repco Bank7.50
Yes Bank7.25
Indusindbank7.25
IDFC First Bank7.25
Bandhan Bank7.25
Tamilnad Merchantile Bank7.10
Development Credit Bank (DCB)7.00
Karnataka Bank6.80

Best Recurring Deposit (RD) interest rates for 2 years Tenure


Bank2 Years
RBL Bank7.65
Lakshmi Vilas Bank7.50
Repco Bank7.50
Bandhan Bank7.40
Development Credit Bank (DCB)7.40
Yes Bank7.25
Indusindbank7.25
IDFC First Bank7.25
Tamilnad Merchantile Bank7.00
Deutsche Bank7.00

Best Recurring Deposit (RD) interest rates for 3 years Tenure


Bank3 Years
Development Credit Bank (DCB)7.85
Lakshmi Vilas Bank7.50
RBL Bank7.35
Bandhan Bank7.35
Yes Bank7.25
IDFC First Bank7.25
Indusindbank7.15
Repco Bank7.00
Deutsche Bank7.00
HDFC Bank6.85

Best Recurring Deposit (RD) interest rates for 4 years Tenure


Bank4 Years
Development Credit Bank (DCB)7.65
Lakshmi Vilas Bank7.50
RBL Bank7.35
Bandhan Bank7.35
Yes Bank7.25
Deutsche Bank7.25
IDFC First Bank7.20
Indusindbank7.15
Repco Bank7.00
Federal Bank6.80

Best Recurring Deposit (RD) interest rates for 5 years Tenure


Bank5 Years
Deutsche Bank7.75
Development Credit Bank (DCB)7.65
RBL Bank7.50
Lakshmi Vilas Bank7.25
Bandhan Bank7.25
Yes Bank7.25
IDFC First Bank7.20
Indusindbank7.15
Repco Bank7.00
Federal Bank6.80

Comparison of Recurring Deposit (RD) interest rates in India


Top and Best Recurring Deposit (RD) Interest Rates and Comparison

FAQs on Recurring Deposits


1) Is the interest rate fixed in RD?

Yes, the interest rate is fixed in RD which is indicated at the time of opening of recurring deposit account.

2) Is RD tax free?

No. Like fixed deposit, even recurring deposit interest is taxable. You need to add this to your taxable income and pay income tax based on your tax slab. If your total income including recurring deposit is not taxable, you need not pay income tax.

3) Do bank deduct TDS on recurring deposit?

Like fixed deposit, even for recurring deposit, banks would deduct TDS on the interest earned on the RD. However, if your income is not taxable, you can submit form 15G/H online to your bank so that they would not deduct TDS.

4) What is the minimum period for which I can open Recurring Deposit?

Recurring Deposit can be opened for a minimum 6 month tenure.

5) What is the maximum period for which I can open Recurring Deposit?

Recurring Deposit can be opened for a maximum of 10 years tenure.

6) Can I close my RD account before maturity?

Most of the banks have common rules regarding closure of RD account before maturity. Their would be penalty of 1% of the total invested amount or 2% lower interest rate is paid to you.

7) Which bank gives best RD rates?

This would depend on the tenure of the RD. Please refer above tables for 1 year to 5 years tenure RD rates.

8) What is the RD interest rate in Post office?

RD interest rate in the post office is revised every quarter. For the period Oct-2019 to Dec-2019, the RD interest rate in the post office is 7.2% which is compounded quarterly. One should note that Post office RD is for 5 years tenure only. You can check latest post office interest rates before you deposit. 

9) Can I deposit extra money in RD?

In general recurring deposit, you need to deposit fixed amount. However many banks are offering variable recurring deposit / flexible recurring deposit where you need to invest minimum amount. Over and above such minimum amount, you can invest any amount above that.

10) What happens if I don’t pay RD installments?

RD installments need to be paid every month. In case you don’t pay RD installment of any amount, then your RD account would be deactivated till you deposit that month installment.

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Suresh KP

Best Recurring Deposit (RD) Interest Rates