By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Investment Simplified
  • Tax
    • Popular Searches
    • What is Form 16?
    • Trademark Registration Fees
    • TDS Full Form
    • Ad Valorem Tax
    • How to Save Tax?
  • Cryptocurrency
    • Popular Searches
    • Benefits of Using Blockchain Technology
    • What Is A Cryptocurrency Hardware Wallet?
    • What is Market Capitalization In Crypto?
    • What Is Staking In Crypto?
    • Investor’s Guide to Crypto Trading
  • Aadhaar
    • Popular Searches
    • How to Book Aadhaar Card Appointment?
    • E-Aadhaar And It’s Benefits
    • What is a Masked Aadhaar?
    • ESign Aadhaar: A Complete Guide
    • Aadhaar Card Address Change
  • Investment
    • Mutual Funds
      • Popular Searches
      • Tax Saving SIP
      • What is Arbitrage Fund?
      • What are Gold Mutual Funds?
      • What are Contra Funds?
      • Best SIP Plans to Invest
    • EPF
      • Popular Searches
      • EPFO Member Portal – Login, Registration
      • EPFO Establishment Search
      • Guide to Your EPFO Member Login
      • EPF Interest Rate
      • What Is UAN Activation?
  • Insurance
    • General Insurance
      • Popular Searches
      • Home Loan Insurance Calculator
      • What is Marine Insurance?
      • How Does a Marine Insurance Policy Work?
      • Types of Marine Insurance in India
      • Types of General Insurance in India
    • Car Insurance
      • Popular Searches
      • Commercial Vehicle Insurance Guide
      • What is Own Damage Insurance?
      • Car Insurance with Zero Depreciation
      • Engine Protect in Car Insurance
      • Return to Invoice Cover Meaning
    • Travel Insurance
      • Popular Searches
      • Domestic Travel Insurance
      • How to Buy Travel Insurance Online?
      • What is Overseas Travel Insurance?
      • International Travel Insurance
      • What is Travel Medical Insurance?
    • Pension & Retirement
      • Popular Searches
      • Commutation of Pension Calculator
      • EPF Pension calculator
      • Public Provident Fund
      • What is Individual Retirement Account?
      • Calculating PPF
  • Banking
    • Bank Timings
      • Popular Searches
      • Bank of Baroda Timings
      • IDBI Bank Timings
      • Union Bank Timings
      • Karnataka Bank Timings
      • Central Bank of India Timings
      • Canara Bank Timings
    • Mini Statement
      • Popular Searches
      • Axis Bank Mini Statement
      • HDFC Mini Statement
      • Bank of Baroda Mini Statement
      • Union Bank of India Mini Statement
      • SBI Mini Statement
    • Balance Enquiry
      • Popular Searches
      • Canara Bank Balance Check Number
      • SBI Balance Enquiry
      • Union Bank Balance Check Number
      • BOB Balance Enquiry
      • PNB Balance Check
    • NEFT
      • Popular Searches
      • HDFC NEFT
      • SBI NEFT
      • Axis Bank NEFT
      • ICICI Bank NEFT
      • Canara Bank NEFT
    • Net Banking
      • Popular Searches
      • HDFC Bank Net Banking
      • SBI Net Banking
      • ICICI Net Banking
      • Axis Bank Net Banking
      • IOB Net Banking
    • Customer Care
      • Popular Searches
      • Central Bank of India Customer Care Number
      • Bank of Baroda Customer Care Number
      • Bank of Maharashtra Customer Care
      • PNB Customer Care Number
      • IOB Customer Care Number
    • UPI
      • Popular Searches
      • BHIM
      • Google Pay
      • BHIM SBI Pay
      • Union Bank UPI
      • HDFC UPI
    • Debit Card
      • Popular Searches
      • SBI Debit Card
      • HDFC Debit Card
      • PNB Debit Card
      • Axis Bank Debit Card
      • Kotak Debit Card
    • RTGS
      • Popular Searches
      • RTGS Process
      • SBI RTGS
      • ICICI Bank RTGS
      • Axis Bank RTGS
      • HDFC RTGS
    • IMPS
      • Popular Searches
      • IMPS Limit
      • IMPS vs. NEFT
      • IMPS vs. NEFT vs. RTGS
      • MMID
    • Cheque
      • Popular Searches
      • Types of Cheques
      • Blank Cheque
      • Cancelled Cheque
      • Account Payee Cheque
      • Banker’s Cheque
    • Bank Holidays
      • Popular Searches
      • Bank Holidays in January 2023
      • Bank Holidays in February 2023
      • Bank Holidays in March 2023
      • Bank Holidays in April 2023
      • Bank Holidays in May 2023
  • About Us
  • Contact
Reading: Recurring Deposit Interest Rates
Share
Investment Simplified
Search
  • Tax
    • Popular Searches
    • What is Form 16?
    • Trademark Registration Fees
    • TDS Full Form
    • Ad Valorem Tax
    • How to Save Tax?
  • Cryptocurrency
    • Popular Searches
    • Benefits of Using Blockchain Technology
    • What Is A Cryptocurrency Hardware Wallet?
    • What is Market Capitalization In Crypto?
    • What Is Staking In Crypto?
    • Investor’s Guide to Crypto Trading
  • Aadhaar
    • Popular Searches
    • How to Book Aadhaar Card Appointment?
    • E-Aadhaar And It’s Benefits
    • What is a Masked Aadhaar?
    • ESign Aadhaar: A Complete Guide
    • Aadhaar Card Address Change
  • Investment
    • Mutual Funds
      • Popular Searches
      • Tax Saving SIP
      • What is Arbitrage Fund?
      • What are Gold Mutual Funds?
      • What are Contra Funds?
      • Best SIP Plans to Invest
    • EPF
      • Popular Searches
      • EPFO Member Portal – Login, Registration
      • EPFO Establishment Search
      • Guide to Your EPFO Member Login
      • EPF Interest Rate
      • What Is UAN Activation?
  • Insurance
    • General Insurance
      • Popular Searches
      • Home Loan Insurance Calculator
      • What is Marine Insurance?
      • How Does a Marine Insurance Policy Work?
      • Types of Marine Insurance in India
      • Types of General Insurance in India
    • Car Insurance
      • Popular Searches
      • Commercial Vehicle Insurance Guide
      • What is Own Damage Insurance?
      • Car Insurance with Zero Depreciation
      • Engine Protect in Car Insurance
      • Return to Invoice Cover Meaning
    • Travel Insurance
      • Popular Searches
      • Domestic Travel Insurance
      • How to Buy Travel Insurance Online?
      • What is Overseas Travel Insurance?
      • International Travel Insurance
      • What is Travel Medical Insurance?
    • Pension & Retirement
      • Popular Searches
      • Commutation of Pension Calculator
      • EPF Pension calculator
      • Public Provident Fund
      • What is Individual Retirement Account?
      • Calculating PPF
  • Banking
    • Bank Timings
      • Popular Searches
      • Bank of Baroda Timings
      • IDBI Bank Timings
      • Union Bank Timings
      • Karnataka Bank Timings
      • Central Bank of India Timings
      • Canara Bank Timings
    • Mini Statement
      • Popular Searches
      • Axis Bank Mini Statement
      • HDFC Mini Statement
      • Bank of Baroda Mini Statement
      • Union Bank of India Mini Statement
      • SBI Mini Statement
    • Balance Enquiry
      • Popular Searches
      • Canara Bank Balance Check Number
      • SBI Balance Enquiry
      • Union Bank Balance Check Number
      • BOB Balance Enquiry
      • PNB Balance Check
    • NEFT
      • Popular Searches
      • HDFC NEFT
      • SBI NEFT
      • Axis Bank NEFT
      • ICICI Bank NEFT
      • Canara Bank NEFT
    • Net Banking
      • Popular Searches
      • HDFC Bank Net Banking
      • SBI Net Banking
      • ICICI Net Banking
      • Axis Bank Net Banking
      • IOB Net Banking
    • Customer Care
      • Popular Searches
      • Central Bank of India Customer Care Number
      • Bank of Baroda Customer Care Number
      • Bank of Maharashtra Customer Care
      • PNB Customer Care Number
      • IOB Customer Care Number
    • UPI
      • Popular Searches
      • BHIM
      • Google Pay
      • BHIM SBI Pay
      • Union Bank UPI
      • HDFC UPI
    • Debit Card
      • Popular Searches
      • SBI Debit Card
      • HDFC Debit Card
      • PNB Debit Card
      • Axis Bank Debit Card
      • Kotak Debit Card
    • RTGS
      • Popular Searches
      • RTGS Process
      • SBI RTGS
      • ICICI Bank RTGS
      • Axis Bank RTGS
      • HDFC RTGS
    • IMPS
      • Popular Searches
      • IMPS Limit
      • IMPS vs. NEFT
      • IMPS vs. NEFT vs. RTGS
      • MMID
    • Cheque
      • Popular Searches
      • Types of Cheques
      • Blank Cheque
      • Cancelled Cheque
      • Account Payee Cheque
      • Banker’s Cheque
    • Bank Holidays
      • Popular Searches
      • Bank Holidays in January 2023
      • Bank Holidays in February 2023
      • Bank Holidays in March 2023
      • Bank Holidays in April 2023
      • Bank Holidays in May 2023
  • About Us
  • Contact
Investment Simplified > Investment > Recurring Deposit Interest Rates
Investment

Recurring Deposit Interest Rates

Lakshey Bahl
Lakshey Bahl May 11, 2022 11 Min Read
Updated 2023/01/13 at 1:04 PM
Share
SHARE

Recurring Deposit (RD) is a type of financial deposit scheme wherein you are required to pay a fixed amount of money in the bank at fixed intervals of time. You can think of it as an investment scheme, which helps you inculcate the habit of saving money from your regular source of income and compound it at a fixed rate of interest for a long time. Here, you are going to get assured returns, compounded on a lump sum amount accumulating after a long term (say 5 years). In this article, we will understand everything you need to know about recurring deposits and RD interest rates.

Contents
Recurring Deposits Interest Rates OverviewRecurring Deposit Interest Rates Comparison of BanksHow to Calculate Interest Rate for Recurring Deposit Scheme?Tax on Recurring Deposit Interest RatesTypes of Recurring Deposit Interest RatesKey Features of Recurring Deposit (RD)Benefits of Recurring Deposit InvestmentDifferent Types of RD ProductsConclusionFAQs on Recurring Deposit Interest Rates

Recurring Deposits Interest Rates Overview

The RD interest rates offered by banks depend on various factors like which category the depositor falls under and the tenure of the scheme. Most financial institutions offer a higher rate of interest to senior citizens.

There are many types of recurring deposit schemes available nowadays. Apart from that standard scheme, there are some additional special schemes that are made for people to help fulfil their financial objectives. Given below is a tabular overview of the features of a recurring deposit:

RD Feature NameRelevant Feature
Minimum Deposit₹ 10 – ₹ 500 (depends on the bank)
Rate Of Interest2% – 8% (depends on bank)
Interval of Rate CalculationMostly quarterly
Range of Tenure6 months – 10 years
Partial WithdrawalNot allowed

Also Read: Post Office RD Interest Rate

Recurring Deposit Interest Rates Comparison of Banks

The following table shows the RD interest rates for a few banks in India as of August 2022.

BankRD Interest Rates
(General Public)
RD Interest Rates
(Senior Citizens)
HDFC3.75 to 5.75%4.25 to 6.50%
ICICI3.75 to 5.75%4.25 to 6.50%
SBI5.30 to 5.50%5.80 to 6.30%
Axis bank4.65 to 5.75%4.90 to 6.50%
Bandhan Bank4.50 to 6.50%5.25 to 7.25%
rd interest rates

How to Calculate Interest Rate for Recurring Deposit Scheme?

RD interest rates can grow your money depending on various factors like the amount deposited, tenure and the rate of interest. The final maturity amount can be calculated using the formula mentioned below:

M = R [(1+i) n – 1]/ 1 – (1+i) -1/3

Where, M = maturity value; R = monthly instalment; n = number of quarters; 

i = rate of interest/400

Using the above formula, you will get a rough idea of how much you may earn depending on the choice of your deposit amount and the tenure of maturity. You will notice that the longer the tenure, the better your returns from the scheme. It is recommended to invest in RD for a tenure longer than 2 years to unleash its wealth-creating potential.

Also Read: What is Fixed Deposit?

Tax on Recurring Deposit Interest Rates

Now that we know how to calculate RD interest rates let us talk about the tax imposed on it. A tax of 10% is deducted by the bank if the income (amount of interest gained on the total matured amount) exceeds ₹10,000. If the income gained is lower than that, you can easily save a tax deduction.

Types of Recurring Deposit Interest Rates

Here are the different types of RD schemes available:

Regular Savings Scheme

The regular RD scheme is offered by most banks and NBFCs. Anyone above the age of 18 is eligible to open an account. You just need to choose the deposit amount and the tenure, which may vary with the banks.

Junior RD Scheme

A lot of banks also allow individuals below the age of 18 years to open an RD account under the supervision of a guardian. Parents can use this money to invest in their children’s education. The returns gained under this scheme are usually similar to or higher than a regular RD scheme.

rd interest rates

Senior Citizens RD Schemes

The RD interest rates offered to senior citizens are higher than the regular rates. The interest under this RD scheme is compounded quarterly.

NRE/NRO RD Schemes

Most banks provide Non-residential Indians with an option to open an RD with NRE/NRO recurring deposit account. In an NRE or Non-resident external account, the interest accrued is free from taxes. Moreover, this account can be easily moved to the investor’s home country. In the case of NRO or Non-resident ordinary account, the interest earned is taxable at the rate of 30%, plus there is an additional CESS as well. This is repatriable and subject to featured requisites.

Special RD Schemes

Banks these days offer specially customized RD schemes to suit the requirements of a variety of people. For example, ICICI bank offers the iWish deposit, which allows individuals to contribute different amounts of money to their RD accounts.

Also Read: Senior Citizen Fixed Deposit Interest Rates

Key Features of Recurring Deposit (RD)

Recurring Deposit Interest Rates depend upon the finance-providing institution where you have to open a Recurring Deposit account. The RD interest rates can vary from bank to bank. Other than that, there is a lot more to know about the benefits of RD in wealth creation.

  • The joy of investment in a risk-free condition can be obtained starting from a deposit amount as low as ₹ 10.
  • It has a flexible tenure ranging from 6 months up to 10 years. One thing to keep in mind is that if you select a time period for your RD maturity, you are not allowed to withdraw money in between. 
  • Some banks provide you with an overdraft facility or a loan against the deposit as collateral. This becomes a risky affair since you have to pay the loan amount in a lump sum to avail partial withdrawal of the deposit. Therefore, it is recommended not to opt for partial withdrawal even if the option is available in the bank.

Currently working on a salary basis, if you wish to start your own business soon, but don’t have the capital to invest, RD is the perfect solution for you to grow a lump sum capital for your dream start-up!

Also Read: Difference Between FD and RD

Benefits of Recurring Deposit Investment

Recurring Deposit is a great way to save money regularly while gaining interest on it till it matures. This aids in wealth creation. The following are the benefits of RD:

  • This is the best capital-growing option for people with a fixed salary as the only source of income. It inculcates a habit of saving money regularly, which can be used in the future as a lump sum. 
  • RD interest rates in banks might differ but will not change once an investment has started. RD interest rates are not subject to market swings, and, therefore, you can be assured of your rate to stay fixed for the entire tenure of the Recurring Deposit.
  • RD interest rates and the deposits being as low as ₹10 serves as an encouraging medium of risk-free investment with assured returns, especially for middle-class families.
rd interest rates

Different Types of RD Products

Anyone who can produce a valid proof of identity above the age of 18 can be eligible to open a Recurring Deposit account. Children below the age of 18 would need the permission of a supervising guardian through whom the RD can be created.

Here is a list of some banks offering different types of RD products:

BanksRD Products
ICICI– Croma Delightful Deposits
– Tanishq Jewelry Plan
– Thomas Cook Holiday Savings Plan
– MakeMyTrip Holiday Savings Plan
SBI– Holiday Saving RD
Central Bank of India– Yatha Shakti Jama Yojna
– Samriddhi Half Yearly Recurring Deposit
– Samriddhi Quarterly Recurring Deposit
Bank of Baroda– Cent Lakhpati
– Cent Swa Shakti Flexi
– Cent Millionaire

Conclusion

As an RD scheme requires you to make regular investments, it creates a habit of saving money. The RD interest rates offered by banks and POs differ in terms of tenure also. The more you invest in an RD, the better would be your returns. It is important to first do your research and choose the best RD interest rates offered by competitive banks for a suitable tenure for max returns. 

So, go and open a recurring deposit account today for future plans!

FAQs on Recurring Deposit Interest Rates

1. How can I apply for a recurring deposit account?

If you wish to open an RD account in the same bank where you currently hold an account, you have the option available in your net banking app or you can apply for an RD account by visiting the bank’s official website.

2. Will the RD amount be directly credited to my bank account on the maturity date?

When the maturity date arrives, the lump sum final amount will be automatically credited to your bank account with a notice about the same.

3. Do I need to provide a nominee for my RD maturity amount?

The answer is yes, a nominee is needed for such kinds of schemes and can be changed anytime before the maturity date by producing proper relevant documents for the same.

4. What happens if I delay the monthly deposit payment?

Generally, the RD interest rate and the calculation of the matured amount are upon the assumption that you will deposit a fixed amount every month. If you miss one, the bank might put the penalty interest for the whole month or ask for a cash penalty, which can be a portion of the monthly deposit. The end amount would be affected either way. Even if the bank does not charge you for missing a deposit, the final amount will be affected.
In cases like when there are as many as 6 missed deposits, the bank has the right to close that RD account until the outstanding amount is repaid.

5. What are the charges for premature RD account closure?

In case of premature account closure or withdrawal of the deposited amount, banks have different procedures to charge the account holder as a form of penalty. For a bigger deposit amount, banks can charge up to 1% of the total amount as a penalty for premature account closure.

6. How is the maturity amount on RD calculated by the banks?

The maturity amount depends on the tenure of the investment and the interest rate offered by the banks.

7. What happens to the account if instalments are skipped/not paid on time?

If the investor does not pay the deposit amount for consecutive months, their RD account will be deactivated or closed until the outstanding amount is paid.

8. What happens when the RD matures?

At the time of maturity, the account holder is paid the principal amount along with interest earned during the tenure of the Recurring Deposit.

9. Who is eligible to open an RD account in India?

The following entities are eligible to open an RD account:
– Any individual
– Any minor who is above the age of 10 can open an RD account after providing proof of name
– Any minor below 10 under the guardianship of a legal guardian
– Any corporate, proprietorship or commercial organisation
– Any government organisation

Share this Article
Facebook Twitter Whatsapp Whatsapp Email Print
Previous Article Recurring Deposit Interest Rates Post Office RD Interest Rate – A Comprehensive Guide
Next Article commercial insurance What Is Commercial Insurance and How Does It Work
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular Searches
  • Investment Objectives
  • Recurring Deposit Rates
  • How To Calculate NPS
  • What Is 80C Investment
  • What Is NSC Calculator
  • Best Investment Plan
  • Capital Investment
  • Portfolio Investment
  • NSC Interest Rates
  • Post Office Deposit Interest Rates
  • FD Interest Rates
  • What Is Time Deposit
  • Different Types Of Investments
  • What Is Return On Investment
  • What Is Real Estate Investment
  • Post Office FD Interest Rates
  • Difference Between FD And RD
  • Best Investment Plan For 5 Years
  • What Is Short Term Investment
  • What Is Recurring Deposit

Social Media

Social Media
Facebook
YouTube
Instagram
Twitter
Linkedin

Recent Post

Bank of Baroda Holiday List 2023
Bank of Baroda Holiday List 2023
Banking
Punjab National Bank (PNB) Holiday List 2023
PNB Bank Holiday List 2023
Banking
HDFC Bank Holidays 2023
HDFC Bank Holidays List 2023
Banking
Syndicate Bank Holiday List 2023
Syndicate Bank Holiday List 2023
Banking

You Might also Like

IOB customer care number

IOB Customer Care Number

Indian Overseas Bank is one of the 14 major banks that got…

Read More
PNB Debit Card

Punjab National Bank (PNB) Debit Card

Do you have a PNB debit card and have forgotten its PIN?…

Read More
tax exempt

Tax Exempt: What it Means & How it Works

In India, tax exemptions are divided into several categories based on the…

Read More
Account Payee Cheque

Account Payee Cheque

The most secured type of cheque is an account payee cheque. Such…

Read More
IS logo 250px

We are here to make your investment journey simple by delivering content on financial topics in plain English.

Categories

  • Tax
  • Cryptocurrency
  • Aadhaar
  • Mutual Funds
  • Banking
  • General Insurance
  • Pension & Retirement
  • Car Insurance
  • Travel Insurance

Quick Link

  • About Us
  • Contact
  • Terms & Conditions
  • Privacy Policy
Social Media
Facebook
YouTube
Instagram
Twitter
Linkedin

We are here to make your investment journey simple by delivering content on financial topics in plain English.

Categories

  • Tax
  • Cryptocurrency
  • Aadhar
  • Mutual Funds
  • General Insurance
  • Pension & Retirement
  • Car Insurance
  • Travel Insurance

Quick Link

  • About Us
  • Contact
  • Terms & Conditions
  • Privacy Policy

Social Media

Copyright © 2022 Investment Simplified. All rights reserved.

Welcome Back!

Sign in to your account

Lost your password?