Interest Rate on Recurring Deposit

RD or recurring deposit is a very simple investment plan where the investor deposits a fixed sum of money either with the Bank or post office for a predefined period every month. In return of his investment to RD account, the investor gets interest at a pre defined rate.

All banks and post offices offer recurring deposit facility. You need to select the most convenient bank or post office for you. While selecting we suggest you to look into certain factors like interest rates, convenience in operating, online deposit facility and any other personal requirements if any.

After choosing your bank or post office you are required to select the tenure for which you want to keep investing and the amount that you need to invest. Depending on your bank, you can invest for a minimum period of 6 months and up to a maximum period of 10 years. We at RupayaBazaar.com provide you all information regarding recurring deposit. Thus, we recommend our viewers COMPARE BEFORE APPLY FOR RECURRING DEPOSIT .

 

Bank  General Rates  Senior Citizen Rates  For More Detail
  6.50% - 7.00%  0.00% - 0.00%  Click
  6.25% - 7.00%  6.75% - 7.50%  Click
  6.50% - 7.00%  7.00% - 7.50%  Click
  6.50% - 7.00%  6.50% - 7.00%  Click
  6.50% - 6.80%  7.00% - 7.30%  Click
  7.00% - 7.35%  7.50% - 7.85%  Click
  5.25% - 5.25%  5.25% - 5.25%  Click
  7.00% - 7.10%  7.50% - 7.60%  Click
  6.50% - 7.25%  7.00% - 7.75%  Click
  6.50% - 6.80%  7.00% - 7.30%  Click
  5.75% - 6.90%  6.25% - 7.40%  Click
  6.25% - 7.10%  6.75% - 7.60%  Click
  7.00% - 7.15%  7.50% - 7.65%  Click
  5.25% - 6.50%  5.75% - 7.00%  Click
  5.75% - 6.75%  6.25% - 7.25%  Click
  6.75% - 7.15%  7.25% - 7.65%  Click
  7.00% - 7.00%  7.00% - 7.50%  Click
  6.25% - 6.75%  6.75% - 7.25%  Click
  6.70% - 7.00%  7.20% - 7.50%  Click
  7.00% - 7.85%  7.50% - 8.35% Click
  6.50% - 6.95%  7.00% - 7.45%  Click
  6.00% - 6.80%  6.50% - 7.30%  Click
  7.00% - 7.25%  7.50% - 7.75%  Click
  6.25% - 6.50%  6.25% - 7.00%  Click
  7.00% - 7.10%  7.50% - 7.60%  Click

The formula to calculate the interest is given as under:

I = P ∗ n ( n + 1 ) r 12 ∗ 2 ∗ 100 {\displaystyle I={\frac {P*n(n+1)r}{12*2*100}}} = = P ∗ n ( n + 1 ) r 2400 {\displaystyle ={\frac {P*n(n+1)r}{2400}}} where I is the interest, n is time in months and r is rate of interest per annum and P is the Principal amount.

The formula to calculate the maturity amount is as follows: Total sum deposited+Interest on it = P ( n ) + I {\displaystyle ={P(n)}+I} = P ∗ n [ 1 + ( n + 1 ) r 2400 ] {\displaystyle =P*n[1+{\frac {(n+1)r}{2400}}]}

FAQ on Recurring Deposit

You give your bank a fixed amount of money, every month, for a fixed number of months and at the end of the specified number of months, your bank returns your money along with some more money as interest earned on your deposits. Remember the amount and number of months are fixed and once started, cannot be changed. There are no weekly or quarterly options – only monthly.
You don’t have to go to a branch to deposit the money. When you open your RD account online, it will be linked with your Savings Bank account and your bank automatically debits the money on the date you specify. You just have to make sure that you have enough balance in your SB account. Though you can go deposit it in person, I would suggest leaving that job to the computers as it will be automatic. If case you don’t have enough money in your Savings account, there might be a small penalty for every month you don’t pay. Your won’t lose your existing money, only you would have to pay extra charges when you continue.
Most banks have the minimum amount as Rs.100 or 500. Usually you can only deposit in multiples of 100s. Its better to check with your bank before you begin a RD.
Usually banks have a minimum period of 6 months and maximum period of 120 months (10 years). There are some banks like SBI (State Bank of India) which has a minimum period of 12 months.
Yes, you can stop your deposits anytime you want. But your interest earned would be hit by a small penalty (usually 1%) for premature withdrawal. You would never incur a loss on the principal money your deposited.
Usually RDs interest rates are very similar to Fixed Deposit’s rates. The rates also differ based on how long your term is for. Shorter terms like 6 or 9 months will earn lesser rate than 2 or 3 years. It holds true for the other end of the spectrum too. 10 years might have lesser rates too. Senior citizens earn a slightly higher rates (usually 0.25%-0.5% points) As interest rates differs depending on the Reserve Bank’s rates, you should check your bank’s website before starting a RD. Currently rates range from 7.5% to 9% per annum.
Yes. The interest earned is taxable depending upon your personal tax bracket. However the bank doesn’t deduct the tax at source and you have to proactively declare this interest income when you file taxes.
Yes. Most banks give loan against the money you have in this account. Usually it is around 90% of your account balance. The interest you need to pay for that loan will also be very less compared to a personal loan. This interest rate will be around 0.5% to 1% above the deposit rate the bank pays you. Using this loan facility is better if you suddenly require some cash for unforeseen circumstances, since the interest on this would be less than what a normal personal loan will cost you. Also your deposit keeps earning interest and you don’t have to pay a penalty of premature withdrawal of the deposit.
Most banks have a online calculator, where you enter your monthly deposit, period and interest rate and it would give you what you will get back at the end.