Best Recurring Deposit Rates 2023
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Recurring deposit is one of the favorite investment tools for Indians because of two main reasons—earn benefits of both demand and time deposits. It is best-suited for salaried and self-employed individuals to pay equal periodic installments and get it back with interest as a lump-sum at the time of maturity. Forbes Advisor India examined the best recurring deposit rates currently available across banks and created a list of the top offerings.
- Best Recurring Deposit Rates 2023
- IndusInd Bank
- Bandhan Bank
- Karur Vysya Bank
- RBL Bank
- IDFC First Bank
- South Indian Bank
- Karnataka Bank
- Federal Bank
- City Union Bank
- Yes Bank
- Forbes Advisor Ratings
- Methodology
- How does Recurring Deposit Work?
- Documents Required to Open RD Account
- How to Calculate Recurring Deposit Maturity Amount?
Best Recurring Deposit Rates 2023
IndusInd Bank
Min RoI
5.5%
(9 months)
Max RoI
6.75%
(18 to 61 installments)
Internet/Mobile Banking
Yes
Min RoI
5.5%
(9 months)
Max RoI
6.75%
(18 to 61 installments)
Internet/Mobile Banking
Yes
IndusInd Bank entered into the digital lending and deposits platform from as early as 2021, and now operates with close to 2,000 branch networks across the country, offering both term loans and lines of credit. The bank is offering comparatively higher interest rate on both min-max recurring deposits, for deposits after completion of nine installments at 5.5% up to 6.75% for 18 to 61 installments.
One can open an account for INR 500 (minimum investment value) and multiples of INR 100. It offers depositors to earn up to 5.5% interest rate on deposits for up to two lakh investment into the account in 10 monthly installments.
Extra Details
Eligibility: The bank offers RD accounts to both new and existing account holders.
How to apply: New applicants open an RD account online by submitting details and relevant documents for proof of identity and address, along with a passport-size photo, or alternatively visit the bank’s nearest branch.
- No need to open a savings account with the bank to apply for RD.
- No penalty charges for delayed payments.
- Provides preclosure and loan facilities on the deposit.
- Need to call customer service to find out penalty charges on premature withdrawal.
Bandhan Bank
Min RoI
4.5%
(up to 6 months)
Max RoI
7%
(1 to 5 years)
Internet/Mobile Banking
Yes
Min RoI
4.5%
(up to 6 months)
Max RoI
7%
(1 to 5 years)
Internet/Mobile Banking
Yes
The recurring deposit scheme offered by Bandhan Bank can be availed from any of its 5,644 branch networks across the country. The bank offers term deposit interest rates on recurring deposits, from 3% to 7% for deposits up to five years and above.
A depositor can open an account for just INR 100 and additional contribution in multiples of INR 1, with overdraft facility after three months. Depositors also get a passbook for easy account management.
Extra Details
Eligibility: Single and joint accounts.
How to apply: A new applicant must fill up the form with basic details and the bank’s customer representative will get back to you on call.
- Deposit holders can manage their RD accounts online using internet/mobile banking.
- A need to speak to customer service to process the application.
- Details on premature withdrawal fee not available on website.
Karur Vysya Bank
Min RoI
5.5%
(up to 6 months)
Max RoI
6.5%
(2 to 3 years)
Internet Banking
Yes
Min RoI
5.5%
(up to 6 months)
Max RoI
6.5%
(2 to 3 years)
Internet Banking
Yes
Incorporated in the year 1916, Karur Vysya Bank that started with a seed capital of INR 1.20 lakh has now grown into a leading financial institution with 780 branch network. The bank is offering an interest rate ranging from 5.5% to 6.5% for recurring deposits maturing in up to 10 years. On premature withdrawals, it charges an ROI below (1% of the applicable rate for the period the deposit has remained with the bank), but there’s no penalty on delayed payments. The bank provides a loan against depositors’ recurring deposit as security.
Extra Details
How to apply: A new applicant can fill up the online form with basic details and the bank’s customer representative will get back to you on call.
- The RD account can also be applied by companies, institutions, trusts, associations, societies, clubs other than individuals.
- Provision to download deposit account opening form online.
- New applicants have to call the customer service to process their application.
RBL Bank
Min RoI
5%
(after 6th month)
Max RoI
7% (from 15 to 23 installments)
Internet/Mobile Banking
Yes
Min RoI
5%
(after 6th month)
Max RoI
7% (from 15 to 23 installments)
Internet/Mobile Banking
Yes
Listed on both NSE and BSE stock exchanges, RBL Bank has a network of 502 branches across 28 Indian states and union territories. The bank is offering an RoI of 5% to 7% on recurring deposits completing 6 months and 2 years. Its ROI ranges between 5.75% to 6.75% on deposits that mature above 2 years.
The bank charges a 1% penalty on premature withdrawals on the maturity amount. There’s also a 1% fine on every missed installment payable in the next. A depositor can pay their monthly installments with an auto-debit option linked with their savings account with the bank.
On the bright side, even super senior citizens of 80 years and above can avail of 0.75 bps extra rate of interest upon the maturity amount.
Extra Details
Eligibility: Savings account is must to apply for RBL recurring deposit.
How to apply: Both new and existing account holders can create an RD account via mobile app/internet banking, or alternatively visit the nearest RBL Bank branch, with necessary documents.
- Earn attractive rates on maturity.
- Manage RD accounts online using internet/mobile banking.
- A categorized search list of FAQs to resolve queries online.
- Finance education and resource blog.
- Often the website RBL bank takes at least a minute buffer time.
IDFC First Bank
Min RoI
4.5%
(starting 6th month)
Max RoI
7.25% (on 24th month)
Internet/Mobile Banking
Yes
Min RoI
4.5%
(starting 6th month)
Max RoI
7.25% (on 24th month)
Internet/Mobile Banking
Yes
The IDFC First Bank operates with a pan-India presence of 580 branch networks. The bank is currently offering recurring deposits at a maximum 7.25% interest rate for a two-year maturity tenor and a minimum of 4.5% for six months. An RoI of 6.75% for 18-21, 6.25% for 12-15, 6.5% for 27-60, and 6% for 90-120 months deposits are applicable on domestic, NRE, and NRO accounts.
A minimum deposit to open an RD account with IDFC First Bank is INR 1,000. An added 0.5% bps is awarded to senior citizens of 60 to 80 years of age. (100 bps = 1%). A premature withdrawal of funds after 30 days can earn an interest rate up to 4%, however, charges are applicable. The bank does not levy a fine on missed or delayed RD installment.
Extra Details
Eligibility: A depositor must have a savings account with IDFC First bank to open an RD account.
How to apply: Both new and existing account holders can create an RD account via mobile app/internet banking, or alternatively visit the nearest IDFC First Bank branch.
Carry documents: Proof of identification (aadhaar card, passport, voter’s ID, etc).
- Earn attractive rates on maturity.
- Seamless process to apply for RD post online login.
- Display of applicable charges on premature withdrawals not available on the bank’s website.
South Indian Bank
Min RoI
4.25%
(Up to 6 months)
Max RoI
7%
(special deposit rate for 2 years 6 months)
Internet/Mobile Banking
Yes
Min RoI
4.25%
(Up to 6 months)
Max RoI
7%
(special deposit rate for 2 years 6 months)
Internet/Mobile Banking
Yes
South Indian Bank is a private sector scheduled bank established in 1946 under the RBI Act, and is currently operating with 925 branch networks across the country. The bank offers term deposit rates up to 6.4% for deposits maturing up to 10 years. It is currently offering a 7% special deposit rate for deposits maturing in 2 years 6 months.
A depositor can open a recurring deposit account for just INR 100 and additional contribution multiples of INR 1, as well as overdraft facility up to 90% of the outstanding balance.
The bank charges 0.5% penalty on premature withdrawal below INR 5 lakh, and 1% for deposit above INR 5 lakh. No further remittance is allowed after six missed installments. Depositors can set up standing instructions through internet banking for auto payment of installments.
Extra Details
Eligibility: Single and joint accounts.
How to apply: A new applicant can fill up the online form with basic details and the bank’s customer representative will get back to you on call, or alternatively visit the bank’s nearest branch with necessary documents.
- A categorized search list of FAQs to resolve queries online.
- No provision for opening an RD account online.
Karnataka Bank
Min RoI
5.25%
(up to 90 days)
Max Rol
6.4%
(1 to 2 years)
Internet Banking
Yes
Min RoI
5.25%
(up to 90 days)
Max Rol
6.4%
(1 to 2 years)
Internet Banking
Yes
Karnataka Bank is offering an interest rate ranging from 5.25% to 6.4% on recurring deposits. The bank accepts monthly installment by cash and cheques, or depositors can give standing instructions to the bank to debit monthly installments automatically from the account.
In case of missed or delayed payments, the bank charges INR 1.50 per month for every INR 100 on deposits of over five years. However, this penalty can be set off if depositors pay an equal number of advance installments that were missed. The premature closure penalty is waived for deposits up to two crore. Interest cannot be earned on deposit closed prematurely or before the completion of the minimum prescribed period.
Extra Details
How to apply: A new applicant has to dial the toll-free number of the bank’s customer representative to carry forward the application process, or alternatively visit the nearest branch.
- Availability of detailed terms and conditions on recurring deposit.
- A need to speak to customer service to process the application.
Federal Bank
Min RoI
4.25%
(up to 180 days)
Max RoI
7% (on the 700th day)
Internet/Mobile Banking
Yes
Min RoI
4.25%
(up to 180 days)
Max RoI
7% (on the 700th day)
Internet/Mobile Banking
Yes
Federal Savings Fund is a recurring deposit scheme of the bank, and is currently offering an RoI in the range of 4.25% to 6%. It offers a special 7% interest on the deposits maturing in 700 days.
A depositor can open an account in just INR 50 and additional contribution multiples of INR 10. The bank does not allow withdrawal of interest earned on the amount before the maturity of the deposit. Loans are available for depositors against their recurring deposit.
Extra Details
Eligibility: Individuals, guardians on behalf of the minor and even firms and associations can apply for the recurring deposit offered by Federal bank.
How to apply: Both new and existing account holders can create an RD account via mobile app/internet banking, or alternatively visit the nearest Federal Bank branch, with necessary documents.
- Easy to navigate and find information on the bank’s website.
- Take advantage of the blog for financial knowledge.
- Dual mobile banking apps.
City Union Bank
Min RoI
5%
(up to 6 months)
Max RoI
7%
(special deposit rate for 700th day)
Internet Banking
Yes
Min RoI
5%
(up to 6 months)
Max RoI
7%
(special deposit rate for 700th day)
Internet Banking
Yes
City Union Bank is offering an interest rate of 5% for deposits up to six months, and maximum of 6% for above deposits. The bank is currently offering 7% special interest on recurring deposits that matures on the 700th day.
The bank accepts monthly installment by cash and cheques, or depositors can give standing instructions to the bank to debit monthly installments automatically from the account.
In case of missed or delayed payments, the bank charges INR 1.50 per month for every INR 100 on deposits of over five years. However, this penalty can be set off if depositors pay an equal number of advance installments that were missed. The premature closure penalty is waived for deposits up to two crore.
Extra Details
How to apply: A new applicant can dial the toll-free number of the bank’s customer representative or fill up the online form, or alternatively visit the nearest branch to carry forward the application process.
- Provision to set off the missed installment penalty if depositors pay an equal number of advance installments.
- An applicant will have to speak to customer service for the application process.
- A need to call the bank to know the eligibility criterias.
Yes Bank
Min RoI
5.5% (6 months)
Max RoI
6.75% (above 18 months)
Internet Banking
Yes
Min RoI
5.5% (6 months)
Max RoI
6.75% (above 18 months)
Internet Banking
Yes
Yes Bank is offering an RoI in the range of 5.5% to 6.75% on recurring deposits. The bank only accepts monthly installments of minimum INR 1,000, with maximum deposit limit up to INR 1.99 crore. The bank also offers “flexigain recurring deposit” wherein there’s no monthly commitment of installment, with initial booking amount up to INR 5 lakh.
Extra Details
How to apply: While new customers have to call or visit the nearest branch of the bank, existing customers can apply for the bank’s recurring deposit post online login.
- Flexible installment payment option.
- The website does not have enough details on premature withdrawals.
- Call the bank to know your eligibility criteria.
Forbes Advisor Ratings
The above interest rates and details on recurring deposits are updated as on Oct. 14, 2022. While we update this information regularly, banks may have revised the rate of interest on recurring deposits since the page was last updated.
Methodology
Favorable interest rate: Public and private banks that are offering competitive rates of interest on recurring deposits were given the top priority while selecting the top-10 best deposit rates 2023. Websites of banks under maintenance or taking long response time were not included.
Customer-centric: Banking institutions should provide comprehensive services for all financial needs of account holders. Ease of access to information on the website, mobile apps, phone call, or through presence of physical branch networks should correspond well to deposit holders.
Technology enablement: A bank should be equipped with end-to-end digitization to seamlessly process their financial service.
Penalty and charges: Low to mid scoring has been given to all banks.
How does Recurring Deposit Work?
Account for
- Personal: Individual account, joint account, minor below 10 years old, parents or guardian on behalf of a minor.
- Registered Business: Clubs, associations, institutions, registered partnerships and joint stock companies.
Deposit amount
Minimum deposit amount in an RD account varies among banks, which usually starts from INR 100 to INR 1,000.
Tenure
The minimum period of deposit in RD is six months.
Maximum period of a deposit is up to 10 years.
Rate of interest
Currently, the banks that are mentioned above are providing an RoI of 4.5% to 7.25% on recurring deposits with a tenure up to one year.
Premature withdrawal
Depending on the bank pollicy, premature withdrawal is allowed with a penalty fee up to 1% on the interest earned.
How to deposit on RD
Deposits on an RD account can be funded monthly through standing instructions to deduct the amount directly from an individual’s savings or current account.
Taxation
If an individual’s earning on interest crosses the threshold limit INR 40,000 (INR 50,000 for senior citizens) in a financial year, the amount is taxable in accordance with Section 194 A 3 (i)(a) of the Income Tax Act.
Loan benefit
Most banks provide loan facilities up to 95% of the deposit amount.
Provision for nomination
Applicants can appoint a nominee who would receive the fund on the former’s absence.
Delay in payment
Depending on banks, missed payments incur a penalty starting INR 1 for every INR 100 per month.
Premature closure
Premature closure is allowed with a penalty fee fixed by the bank.
Documents Required to Open RD Account
Along with the duly signed and filled application form, applicants will be required to submit following documents as:
Identity/address proof
- Passport
- PAN card
- Aadhar card
- Voter ID card
- Driving licence
- Ration card
- Telephone bill
- Electricity bill
- Senior citizen ID card
- Service Discharge Certificate
- PPO in case of Pensioner
- Birth certificate (account for minor)
Income proof
- Minimum six months bank statement
- Cancelled cheque
- ID card issued by employer (if any)
- Salary slip
How to Calculate Recurring Deposit Maturity Amount?
The interest rate on recurring deposits is calculated using the compounding formula. Let’s understand this with an example:
If you’re applying for a recurring deposit with a monthly deposit of INR 5,000 for tenure of one year, and the bank is offering 8% rate of interest on the sum, the calculation of maturity value will be as follows:
Recurring deposit formula: A = PX(1+R/N)^(NT).
Where, A= Maturity amount; P=Principal amount; N= Compounding frequency; R= Rate of interest; and T=Tenure.
Maturity Amount = INR 5000X(1+.0825/4)^(4X12/12) = INR 62730.85.
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