HDFC Bank, Axis Bank, ICICI Bank and Kotak Mahindra Bank are among a few banks that have announced a hike in recurring deposit rates after the Reserve Bank of India hiked the repo rate.
A recurring deposit scheme allows for earning interest on a fixed amount that is deposited every month for a predetermined period of time. Recurring deposits are very popular among the risk averse depositors on account of their good returns and savings benefit.
The main advantage of an RD is that within one year, the principal amount gets compounded multiple times with the interest amount also getting added to the principal. However, 10 per cent of the interest that you earn on recurring deposit investments are deducted as tax deducted at source. Interest rates are fixed throughout the tenure, and they vary depending on the bank and the chosen tenure.
The recurring deposits offered by banks are in the tenure of six months to 10 years. Like a fixed deposit, the principal is returned at maturity, and interest is paid either all at once or in instalments.
Here is a short comparison of the RD interest rates offered by State Bank of India, Axis Bank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank and Punjab National Bank.
SBI RD Interest Rates
SBI is offering rates between 6.50 and 7 per cent for maturities ranging from 12 months to 10 years. The minimum amount of deposit is Rs 100 and subsequent deposits can be made in multiples of Rs 10.
If the account holder fails to make six consecutive payments, the bank will close the account and pay the remaining balance. Deposits with a tenure of between two years and three years will earn interest at seven per cent, while deposits with a tenure of 5-10 years will fetch a rate of return of 6.5 per cent. Deposits for 1-2 years will receive 6.8 per cent interest. Senior citizens are eligible for 50 basis point (bps) extra over general depositors.
HDFC Bank RD Interest Rates
HDFC Bank is offering general depositors an interest rate in the range of 4.5-7.10 per cent on RDs maturing between six months and 10 years. Seniors will earn 50 bps extra on their deposits.
The maximum rate of interest of 7.10 per cent is being offered on RDs of 15-month tenure.
PNB RD Interest Rates
For general depositors, PNB is offering a rate of interest in the range of 5.5-7.25 per cent on recurring deposits maturing between six months and 10 years. Deposits with a 2-3 year tenure will earn 6.75 per cent, while 5-10 year deposits will earn 6.5 per cent. Depositors can get 6.75 per cent interest on
1-2 year deposits. PNB is also offering an interest rate of 7.25 per cent on a specific tenure of 666 days.
Axis Bank RD Rates
Axis Bank is offering its customers with recurring deposit facility from a minimum tenure of six months to a maximum tenure of 10 years. The interest rate ranges from 5.75 per cent to 7.26 per cent. A tenure extending from two years to 30 months will earn depositors a rate of interest of 7.26 per cent.
From 30 months to two years, the rate of interest offered on RD deposit is 7.15 per cent.
Kotak Mahindra Bank RD Rates
Kotak Mahindra Bank is providing a rate of interest of 6-7.20 per cent on tenures ranging from six months to 10 years.
A maximum deposit rate of 7.20 per cent is paid on deposits with a tenure of 15 months to 21 months.
ICICI Bank RD rates
The interest rate for ICICI Bank’s recurring deposits ranges from 4.75 per cent to 7.10 per cent for a tenure ranging from six months to 10 years. The maximum interest of 7.10 per cent is paid on RDs with tenure of 15-24 months.
The minimum deposit is Rs 500 and in multiples of Rs 100.
