Doesn’t matter if it is year 2024 or 2050, saving money wisely should be priority of every earner. Recurring Deposit (RD) is considered one of the safest and most straightforward ways to grow your savings. Whether you’re planning for a future expense, building an emergency fund, or simply looking for a secure investment, knowing the current interest rates offered by various banks is crucial.
This article will guide you through the latest RD interest rates for all major banks, provide a user-friendly RD interest rate calculator, and help you understand which bank might be the best choice for your needs. With our comprehensive comparison and tools, you’ll be well-equipped to make an informed decision and maximize your returns.
What is Recurring Deposit?
I am sure most of you already know it but let’s still discuss it as it might help new investors or people who want to invest their money safely.
A Recurring Deposit (RD) is a type of term deposit offered by banks that allows you to save a fixed amount of money regularly for a specified period. This is different from a lump sum investment(Usually Fixed Deposit), RD helps establish a habit of regular saving, making it ideal for salaried individuals or those with a steady income flow.
How Does a Recurring Deposit Work?
You choose a fixed amount to be deposited every month (or any regular interval, depending on the bank). The bank applies a fixed interest rate for the tenure of your deposit, which could range from 6 months to 10 years. Interest is compounded quarterly, and the accumulated amount is paid to you on maturity.
Key Benefits of Recurring Deposits:
✅ Fixed Returns: The interest rate is fixed at the time of opening the RD, ensuring guaranteed returns regardless of market fluctuations.
✅ Low Risk: RDs are considered low-risk investments as they are not linked to market performance.
✅ Flexible Tenure: You can choose the tenure that suits your financial goals, from as short as 6 months to as long as 10 years.
✅ Partial Withdrawals: Some banks offer the flexibility of partial withdrawals, making it easier to access funds in emergencies.
Difference Between Recurring Deposits and Fixed Deposits:
| Feature | Recurring Deposit (RD) | Fixed Deposit (FD) |
|---|---|---|
| Deposit Frequency | Regular (monthly or quarterly deposits) | Lump sum (one-time deposit) |
| Flexibility | Flexible in terms of deposit amount and tenure | Fixed amount for a fixed period |
| Interest Rate | Generally slightly lower than FDs | Usually higher interest rates |
| Partial Withdrawals | Allowed by some banks with penalty | Typically not allowed or with high penalty |
Recurring Deposit Interest Calculation
No matter what you are investing in, always understand how calculations work. You should be on top of the calculations everytime. You should know exactly, how much interest will you earn over what period. Be a wise investor !
How to Find RD Maturity Amount?
Calculating the interest on a Recurring Deposit (RD) can seem complex, but understanding the formula can help you estimate the returns you can expect at the end of the deposit period. Banks usually compound interest quarterly, which means the interest is calculated every three months and added to the principal amount.
Here’s the formula commonly used to calculate the maturity amount of an RD
A = Maturity Amount
P = Monthly RD installment amount
R = Annual RD interest rate (in decimal form, e.g., 4.2% as 0.042)
N = Compounding frequency (number of quarters in a year, typically 4)
t = Tenure in years
Example Calculation
Let’s say you invest ₹5,000 per month in a Recurring Deposit with an interest rate of 6% per annum for 2 years. Using the formula, you can calculate the total maturity amount you will receive at the end of the tenure.
Principal (P): ₹25,000
Interest Rate (r): 4.2%
Number of Compounding Periods (n): 4 (quarterly)
Tenure (t): 1 years
By applying these values, you can determine how much your RD will grow over time.
Based on these values the maturity amount would be ₹306,888.99
To make this process easier, you can use the Recurring Deposit Interest Calculator provided in this article. Simply enter your monthly deposit amount, interest rate, tenure, and compounding frequency to instantly find out your maturity amount and total interest earned.
Factors Influencing RD Interest Rates 2024
You might have noticed that banks or other financial bodies keep make changes to the Recurring Deposit Interest rate, time to time.
Actually the logic behind this is that the Recurring Deposit (RD) interest rates are influenced by several macroeconomic and bank-specific factors. Understanding these factors can help you make better decisions about where and when to invest.
Here are the factors that influence the interest rates.
RBI Monetary Policy:
The Reserve Bank of India (RBI) plays a crucial role in determining interest rates through its monetary policy. Changes in the repo rate, which is the rate at which the RBI lends to commercial banks, directly impact RD rates. If the RBI raises the repo rate, banks may increase RD rates to attract more deposits.
Inflation Rates:
Inflation affects the real return on deposits. When inflation is high, banks may offer higher interest rates to compensate for the reduced purchasing power of money. Conversely, in a low-inflation environment, RD rates may decrease.
Bank’s Liquidity Needs:
Individual banks may adjust RD rates based on their liquidity requirements. If a bank needs to attract more deposits to meet its lending obligations, it may offer higher RD rates. Conversely, if a bank has sufficient liquidity, it might lower the rates.
Economic Conditions:
Broader economic conditions, such as economic growth, employment rates, and overall market confidence, influence RD interest rates. In a growing economy, interest rates tend to be higher to control inflation, while in a downturn, rates may be lowered to encourage spending and investment.
Competition Among Banks:
Banks often compete with each other to attract depositors. If one bank offers higher RD rates, others may follow suit to remain competitive. Comparing rates across banks can help you find the most attractive offers.
Government Policies:
Changes in government policies, such as tax benefits on interest earned or regulations regarding deposit schemes, can also impact RD rates. For example, changes in tax laws related to interest income might affect the net returns you receive.
Global Market Trends:
Global financial market trends, such as interest rate changes by foreign central banks or fluctuations in foreign exchange rates, can indirectly affect Indian RD rates. For instance, if the US Federal Reserve raises interest rates, it might lead to changes in the Indian banking sector’s policies.
Latest Recurring Deposit Interest Rates November 2024
| Bank Name | General Interest Rates (%) | Senior Citizen Interest Rates (%) |
|---|---|---|
| IDBI Bank | 7.00% – 7.15% | 7.50% – 7.65% |
| ESAF Small Finance Bank | 5.00% – 6.00% | 5.50% – 6.50% |
| Citibank | 2.75% – 3.00% | 3.25% – 4.00% |
| Indian Overseas Bank | 4.90% – 5.20% | 5.40% – 5.70% |
| Yes Bank | 5.00% – 6.50% | 5.50% – 7.25% |
| SBI | 4.40% – 5.50% | 4.90% – 6.20% |
| Bandhan Bank | 4.50% – 5.00% | 5.25% – 5.75% |
| Canara Bank | 4.45% – 5.25% | 4.95% – 5.75% |
| Axis Bank | 4.40% – 5.75% | 4.65% – 6.50% |
| RBL Bank | 4.50% – 6.30% | 5.00% – 6.80% |
| Lakshmi Vilas Bank | 2.75% – 6.00% | 2.75% – 6.50% |
| Ujjivan Small Finance Bank | 4.75% – 6.50% | 5.25% – 7.00% |
| South Indian Bank | 4.10% – 5.65% | 4.00% – 6.15% |
| Equitas Small Finance Bank | 6.25% – 6.50% | 6.75% – 7.00% |
| Union Bank of India | 4.40% – 5.60% | 4.40% – 5.60% |
| Kotak Mahindra Bank | 4.30% – 5.20% | 4.80% – 5.70% |
| Indian Bank | 6.25% – 6.30% | 6.75% – 6.80% |
| ICICI Bank | 3.50% – 5.50% | 4.00% – 6.30% |
| AU Small Finance Bank | 4.00% – 6.00% | 4.50% – 6.50% |
| IndusInd Bank | 5.50% – 6.00% | 6.00% – 6.50% |
| Punjab National Bank (PNB) | 4.40% – 5.30% | 4.90% – 6.05% |
| HDFC Bank | 4.40% – 5.50% | 4.90% – 6.25% |
| Central Bank of India | 4.20% – 5.00% | 4.20% – 5.00% |
| Jana Small Finance Bank | 5.50% – 6.75% | 6.00% – 7.25% |
| Post Office | 6.20% | 6.20% |
| Bank of Maharashtra | 4.00% – 4.90% | 4.50% – 4.40% |
| Punjab and Sind Bank | 4.45% – 5.25% | 4.95% – 5.75% |
| IDFC First Bank | 6.75% – 7.25% | 6.75% – 7.25% |
| UCO Bank | 4.70% – 5.00% | 4.90% – 5.00% |
| Bank of India | 4.30% – 5.05% | 4.80% – 5.50% |
| Bank of Baroda (BOB) | 4.30% – 5.25% | 4.80% – 5.75% |
| Karur Vysya Bank | 4.00% – 5.35% | 4.50% – 5.50% |