Recurring Deposit (RD) Interest Rates

A Recurring Deposit (RD) is a popular savings option that helps individuals build a corpus through fixed monthly contributions while earning interest over a selected tenure. The RD deposit interest rate varies across banks and eligible financial institutions based on factors such as tenure, prevailing interest rates, and the depositor category. Comparing the latest RD deposit interest rate can help you estimate returns and choose an option that matches your financial goals.

While RDs support disciplined saving, some investors may also explore fixed deposits for assured returns over a fixed tenure. Bajaj Finance Fixed Deposit offers assured returns, flexible investment tenures ranging from 12 to 60 months, and investments starting from Rs. 15,000, making it a suitable option for those seeking predictable long-term growth alongside their overall savings strategy.

What is recurring deposit interest rates?

Recurring deposit interest rates determine the returns you earn on the fixed amount deposited every month throughout the chosen tenure. These rates vary across banks and eligible financial institutions and are influenced by factors such as tenure, prevailing interest rate cycles, and institution-specific policies. In 2026, comparing the latest recurring deposit interest rates before investing can help you choose an option that aligns with your savings goals.

Reviewing the latest recurring deposit interest rates and using an RD calculator before investing can help you make an informed savings decision and plan your future financial goals effectively.

Recurring Deposits (RDs) offer a disciplined approach to saving regularly while earning steady returns over a fixed tenure. By committing to a fixed monthly deposit, investors can gradually build a substantial savings corpus over time. You can open a Recurring Deposit account through NetBanking, Mobile Banking, or by visiting the nearest bank/post office branch.

Key Features of a Recurring Deposit Account

• Invest small amounts monthly and earn interest comparable to Fixed Deposits
• Safe investment option unaffected by market fluctuations
• Interest rate remains fixed for the entire RD tenure
• Receive a lump sum amount upon maturity
• Consistent rate of return, even with monthly instalments
• Flexible tenure options
• Deposit amounts starting from Rs. 500, in multiples of Rs. 100, up to Rs. 2.99 crore (but this can vary between RD providers)
• Option for premature closure available
• No penalty on early withdrawal (subject to RD provider's policy)
• Convenient online account opening and management (subject to RD provider's policy)

If you ever plan to withdraw your RD savings, you can secure your financial future by reinvesting the amount in a Bajaj Finance Fixed Deposit. Open an FD account and get up to 7.75% p.a. returns. 

What is the eligibility criteria for earning RD interest? 

To earn recurring deposit (RD) interest, you must meet the eligibility requirements specified by the bank or eligible financial institution. While the criteria may vary slightly, the basic conditions remain similar across most providers in 2026. Meeting these requirements ensures smooth account opening and uninterrupted interest earnings throughout the chosen tenure.

General eligibility criteria include:

• Resident individuals who meet the institution's account opening requirements.
• Adults aged 18 years and above can open an RD account independently.
• Senior citizens may be eligible for preferential RD interest rates, where offered.
• Minors can open an RD account through a parent or legal guardian. Some institutions also permit older minors to operate accounts independently, subject to applicable rules.
• Joint RD accounts are generally permitted for two or more eligible applicants.
• Valid KYC compliance is mandatory before the account becomes operational.

Always review the institution's latest eligibility conditions before opening a recurring deposit account, as specific requirements may differ.

Documents for earning recurring deposit interest

Opening a recurring deposit account is usually a simple process, especially if you already have a savings account with the same bank. In 2026, many banks and eligible financial institutions also offer a fully digital account opening process using e-KYC. Keeping the required documents ready helps complete the application quickly and ensures your deposits start earning interest without unnecessary delays.

You may need the following documents:

• A duly filled recurring deposit application form, if applying offline.
• Proof of identity, such as Aadhaar, PAN, passport, or driving licence.
• Proof of address, if required by the institution.
• PAN and completed KYC documents, wherever applicable
• Passport-size photographs, if requested.

• Existing account details for faster processing if you are already a customer.

  
  

Document requirements may vary across institutions, so verify the latest eligibility and KYC requirements before opening a recurring deposit account.

The interest earned on an RD is calculated using the compound interest formula. The formula is:

The formula for RD maturity is: A = P*(1+R/N)^(Nt)

Where:

This formula serves as the universal method for calculating RD maturity amounts, irrespective of the invested amount or the investment duration. All that's required is to input the specific values.

For example, let us calculate the maturity amount of an RD considering the monthly deposit amount of Rs. 7,000 and an interest rate of 8.50%.

Using the above mentioned formula, here A will be the “Maturity Amount”, P will be “Monthly RD Instalment” (Rs. 7,000), N will be “Compounding Frequency” (number of quarters), R will be “RD Interest Rate” (8.50% or 0.085) and T will be “Tenure” (1 year, equivalent to 4 quarters).

Hence,

A = P*(1+R/N)^(Nt)

= 7000*(1+0.085/4)^(4*12/12)

= Rs. 7,671.40

A = P*(1+R/N)^(Nt)

= 7000*(1+0.085/4)^(4*11/12)

= Rs. 7,521.88

A = = P*(1+R/N)^(Nt)

= 7000*(1+0.085/4)^(4*1/12)

= Rs. 7,049.37

For this specific investment scenario, summing up this series, the total maturity value, i.e., A, equals Rs 85,947.42.

Manually solving such equations can be quite challenging. A Recurring Deposit Calculator swiftly provides you with the exact figure in seconds.

Premature withdrawal of RD

Premature withdrawal is allowed but may attract a penalty. The penalty amount varies across banks and usually involves a reduction in the applicable interest rate.

Partial withdrawal of RD

Some banks allow partial withdrawal of RD funds to meet urgent financial needs. However, this facility may come with restrictions on the amount and frequency of withdrawals.

Tax exemptions of an RD

The interest earned on RDs is taxable under the Income Tax Act. TDS (Tax Deducted at Source) is applicable if the interest exceeds Rs. 40,000 in a financial year (Rs. 50,000 for senior citizens).

To reduce your tax liability and grow your savings, consider investing in Bajaj Finance Fixed Deposits. With competitive rates and tax-saving features, it’s a smart alternative to maximise your returns and financial security. Invest now.

Recurring Deposit schemes are tailored to suit different needs and demographics. Here are the common types:

Regular RD savings scheme

This is the standard RD option, available to all individuals. It offers fixed interest rates and flexible tenures, making it ideal for salaried professionals and small business owners.

RD schemes for minors

These accounts can be opened by parents or guardians on behalf of minors. They help inculcate a habit of saving in children while earning competitive interest rates.

RD schemes for senior citizens

Senior citizens enjoy higher interest rates on RDs, typically 0.25% to 0.50% more than regular rates. This makes RDs a preferred choice for retirees seeking stable returns.

NRE/NRO recurring deposit schemes

Non-Resident Indians (NRIs) can open NRE (Non-Resident External) or NRO (Non-Resident Ordinary) RDs to save in Indian currency. These accounts offer attractive interest rates and tax benefits under specific conditions.

Special recurring deposit schemes

Some banks offer special RD schemes with higher interest rates or additional benefits for specific tenures or customer categories.

For those looking to complement their RD savings and enjoy even higher returns, Bajaj Finance Fixed Deposits provide an excellent option. With flexible tenures, competitive interest rates, and secure investments, it’s the perfect step to enhance your financial portfolio, explore FD options.

Also Read: Can we break RD before maturity?

Recurring Deposits are a reliable and secure way to grow your savings. With assured returns, flexible tenures, and minimal investment requirements, RDs cater to a wide range of financial goals. Whether you are saving for a short-term expense or building a long-term corpus, RDs provide the stability and predictability you need.

You can also consider Bajaj Finance FDs for either short-or long-term savings. Invest in AAA rated FDs now! Check rates.