An RD is an investment product offered by banks, non-banking financial companies (NBFCs), and post offices to individuals earning regular income. In this type of investment, a fixed amount is deposited into the recurring deposit account every month for a fixed tenure. As of 01-01-2024, the 5-year RD interest in the post office is 6.70% per annum. Post office RD interest rates for 5 years are highly lucrative for individuals looking to invest their savings for medium-term goals.
If you are looking for a safe investment option, you can consider fixed deposit. They offer guaranteed returns and a fixed interest rate throughout your investment tenure.
RD interest rates - Overview
Recurring deposits are similar to fixed deposit, with the difference being the flexibility of making monthly instalment payments. The RD interest rates currently range from 2.50%-8.50% p.a., while 5-year recurring deposits in the post office offer attractive interest rates of 6.7% p.a.
Particulars |
Details |
Interest rate range |
2.5% to 8.5% p.a. |
Minimum deposit amount |
Rs. 100 per month |
Investment tenure |
6 months to 10 years |
Interest compound frequency |
Quarterly |
Partial withdrawal |
Not allowed |
Premature closure |
Allowed with penalty |
Types of recurring deposit interest rates
- Regular savings scheme: Banks in India offer recurring deposits on regular savings accounts with interest rates ranging from 2.75% to 7.5% p.a.
- Junior RD scheme: Many banks provide recurring deposit schemes for children. The interest is either equivalent to the regular RD or higher.
- Senior citizens RD scheme: Financial institutions provide higher interest rates to senior citizens. They usually provide interest rates ranging from 3.25% to 7.50%, which is 0.50% per annum over the prevailing interest rate.
- NRE/NRO RD scheme: Non-Resident External (NRE) and Non-Resident Ordinary (NRO) schemes are intended for Indians who reside abroad or hold an NRI status. These schemes offer lower recurring deposit interest rates. Senior citizens holding NRE/NRO accounts are not offered additional interest.
- Special RD schemes: Some banks offer special RD schemes with unique benefits and features, such as higher interest rates, flexible tenures, free insurance coverage, and loan facilities.
Also Read: How to Update KYC for EPF UAN