rd interest rates: Banks RDs vs Post office RD: Which is offering higher interest rate

Recurring deposits are one of the recommended investment options for conservative individuals who cannot afford to save a large sum. A recurring deposit (RD) is a type of investment that allows you to set aside small amounts of money on a regular basis while receiving interest.

A recurring deposit can be opened with the Post office or a bank. The sum of the principal and interest earned over the investment period is the maturity amount for RDs. Interest is compounded every three months. Every month, the savings must be deposited into the account.

Recurring deposit in Post Office interest rate

A monthly deposit must be at least Rs 100, with multiples of Rs. 10 as a minimum, according to the India Post website. Beginning April 1, 2020, the relevant interest rate is 5.8% per annum, compounded quarterly. After 5 years (60 monthly deposits) from the date of opening, the account matures.

Premature withdrawal

After three years from the date of account opening, an RD account can be closed early by submitting a required application form to the local Post Office. If the account is closed prematurely, even one day before maturity, the interest rate on the PO Savings Account will apply. It is not permitted to close an account before the period for which advance deposits have been made has expired.

Banks RD

According to the SBI website, the rate of interest on RDs is as applicable to term deposits for public and senior citizens.

According to HDFC Bank website, “You can start with an investment of Rs1,000 and in multiples of Rs.100 after that. The maximum you can invest in a Recurring Deposit account is Rs 1,99,99,900 a month.” Interest rates vary from 2.90 to 5.50 percent. ICICI Bank offers recurring deposit interest rate between 3.50-5.60 percent on various tenors.

HDFC Bank RD interest rate

SBI RD interest rate


ICICI Bank RD interest rate


Premature withdrawal

According to HDFC Bank website, “A Recurring Deposit is like a Fixed Deposit. Once the RD amount has been deposited, it cannot be withdrawn until maturity. Partial withdrawals from the account are not allowed.”

As per ICICI Bank website, “On premature/partial closure of your FD/RD, interest will be paid as per the rate of interest applicable for the tenure during which the deposit was kept with the Bank subject to penal rates as applicable.”

“Interest paid on premature withdrawal of term deposits could be less than the contracted rate, as per the applicable rule on the date of premature payment,” as per SBI website.

Source link