One of the most preferred risk-free investments in India is the recurring deposit. Recurring Deposit is an investment tool for people with regular incomes in which a fixed amount of money is accumulated monthly into the RD account for a fixed tenure. One can earn a great interest ranging from around 5%-7.85% by using an RD account. RD interest rates are similar to that of Fixed Deposit but the flexibility of monthly installments is what makes RD stand out. The minimum tenure of a fixed deposit ranges from 6 months to 10 years.

Recurring Deposit Interest Rates

The recurring deposit interest rates differ from bank to bank and also on the factors like which category you fall under and the tenure you choose. Almost all the banks privilege senior citizens with a higher rate of interest than regular citizens (who don’t fall under senior citizen category). A variety of recurring deposit rates is made available by banks nowadays. Apart from the regular scheme, some additional special schemes are also made available to people to help them fulfill their goals.

Banks that Provide the Best RD Interest Rates

There are a plethora of banks that provide customers with the facility to get an RD account opened. Let’s have a look at what are top banks provide RDs with a pretty awesome interest as 2019.

Best RD Interest Rates by Various Banks as per November 2019 Data

Bank Senior Citizen RD interest rates Regular RD Interest rates
HDFC Bank 6.50%-7.75% 6.25-7.25%*
SBI 7.20-7.35% 6.70-6.85%
ICICI Bank 6.50%07.35% 6.00-7.25%
Bandhan Bank 7.15-7.85% 6.40-7.10%
Canara Bank 6.85% 7.50% 6.35-7.00%

 *The RD interest rates provided above are for investments less than Rs. 1 crore

Not to mention the fact that banks can cap the rates periodically, hence, it is better to always enquire with the bank first before investing in an RD account in order to avoid hassles later. The rates mentioned are effective since June 2019.

RD Schemes in India with Highest Interest Rates*

Some banks in India offer the best RD interest rates for enticing RD Schemes. We have curated a list with some of the renowned banks providing the best interest rates for RD Schemes.

  • Deutsche Bank provides 8.00% p.a. for a 5-year deposit scheme and hence counted among one of the best RD rates providing banks in India
  • Lakshmi Vilas Bank offers 7.75% p.a. The interest rate for a 1-year tenure, followed by IndusInd Bank at 7.60% p.a.
  • Coming to the 2-year tenure, again Lakshmi Vilas Bank bags the title with the highest rate of interest marked at 7.85% p.a. again followed by Indusind bank at 7.75%
  • For 3-year and 4-year tenures, one can get the best returns with Lakshmi Vilas Bank at 7.85%
  • Some other banks that also provide the best rate of interests on RD savings are: Indusind bank (Rate of interest ranging from 7.25%-7.60%) and Bandhan Bank (7.35%-7.65%)

*Rates provided here are as per November 2019 data

How to Calculate Interest Rate for Recurring Deposit Scheme?

The interest under the recurring deposit scheme is calculated by entailing various factors like invested funds, tenure and the type of scheme selected. You can calculate the interest on your investment either by RD calculator or the formula given below:

M= R[(1+i)n-1]/1-(1+i)-⅓


‘M’ represents maturity value

‘R’ represents monthly installment

‘n’ represents number of quarters

‘i’ represents rate of interest/400

Types of RD Interest Rates

Regular RD Savings Scheme: Indian banks offer recurring deposits to the citizens who have attained 18 years of age. Customers can choose a fixed monthly amount for a tenure of a minimum 6 months to 10 years. Interest can be calculated on a simple or compound basis. A customer can withdraw the lump sum amount at the end of the tenure. Under this scheme, an account can be opened with as low as Rs.10 per month and the interest rates generally range from 7%-8% p.a.

RD Schemes for Kids: Banks also have the scheme under which an account can be opened for kids. Parents or guardians can open this account for their children to start accumulating funds for their future, education and some other needs. The most important part is the returns on this investment can be either equivalent to regular RD schemes or maybe higher. These schemes develop a sense of saving among youngsters.

RD Schemes for Senior Citizen: As mentioned earlier, senior citizens can avail of a comparatively higher rate of interest from RD schemes. Usually, the interest rates are at the higher end of the spectrum and range between 7.5% to 9.25% per annum. Moreover, there are also some schemes available that help senior citizens plan their retirement.

NRE/NRO Recurring Deposit Schemes: NRE (Non-Resident External Account) and NRO (Non-Resident Ordinary Account) may offer a lower rate of interest. On top of that, senior citizens who have an NRE/NRO account are not offered additional interest rates.

Special Recurring Deposit Schemes

Banks also offer a blend of schemes designed to meet the requirements of a variety of customers. These schemes usually offer a higher rate of interest as the customers’ goal is lucid. For instance, ICICI bank offers the iWish deposit scheme which allows the customer to deposit different figures of the amount to their RD account. There are other schemes available by other banks that offer great returns so that the lump sum amount grows manifold making the investment advantageous.


The recurring deposit interest rates is one of the important factors while going for a recurring deposit account. Hence, it is advisable to always scrutinize the interest rates offered by the banks meticulously. Moreover, a recurring deposit scheme inculcates a regular habit of saving among regular income people. Customers should also check for the banks that levy low withdrawal penalty in case of premature withdrawal and also a high rate of interest to make sure that your investment is getting you a handsome amount of money.