Recurring Deposits (RDs) continue to be one of the most reliable and discipline-friendly savings instruments in India in 2025. For monthly savers who prefer guaranteed returns – without market risk – RDs remain a go-to option. This guide covers everything you need to know: how RDs work, latest rate trends, bank-wise comparisons, maturity calculations, tax considerations, pros & cons, and smart tips to maximize returns.
An RD is a savings and investment product offered by banks and post offices where you contribute a fixed amount every month for a predetermined period (tenure). The bank compounds interest (typically quarterly), and at maturity, you receive the total deposits plus interest earned. RDs are ideal for salaried people, regular income earners, and those wanting disciplined savings without market exposure.
Banks and post offices in India offer different types of RD accounts to suit various financial needs. Here are the main RD types available in 2025, along with who they are best suited for:
Each RD type caters to a specific need — whether it’s regular monthly savings, flexible deposits, senior citizen benefits, or NRI financial planning. Choosing the right RD account helps maximize returns and meet your individual savings goals.
Here is a detailed breakdown of the recurring deposit (RD) interest rates offered by leading banks and financial institutions in 2025 — for both general depositors and senior citizens. These figures are indicative and can vary by tenure, deposit amount, and periodic rate revisions. Always check the bank’s official website before investing.
| Bank / Institution | General RD Rate (Approx % p.a.) | Senior Citizen RD Rate (Approx % p.a.) | Remarks / Notes |
|---|---|---|---|
| State Bank of India (SBI) | 6.80% – 7.00% | 7.30% – 7.50% | Reliable public-sector bank; stable rates. |
| HDFC Bank | 7.00% – 7.25% | 7.50% – 7.75% | Popular private bank with flexible RD options. |
| ICICI Bank | 4.75% – 7.20% | 5.25% – 7.75% | Wide network, easy online RD opening. |
| Axis Bank | 5.75% – 7.20% | 6.25% – 7.85% | Decent yields among private banks. |
| Bank of Baroda (BoB) | 5.75% – 7.25% | 6.25% – 7.75% | Public bank; widely accessible. |
| Punjab National Bank (PNB) | 6.05% – 7.30% | 6.55% – 7.80% | Often competitive mid-term rates. |
| Canara Bank | 6.15% – 7.25% | 6.65% – 7.75% | Public-sector coverage in many regions. |
| Indian Bank | ≈ 6.70% p.a. | ≈ 7.20% p.a. | Standard RD scheme on offer. |
| Axis / Private-Sector Mid Banks (e.g. RBL, IndusInd) | ≈ 7.00% – 7.99% p.a. | Up to ≈ 8.25% p.a. | Often offer higher yields, but check deposit-insurance limits. |
| Yes Bank | 7.25% – 8.00% | 7.75% – 8.50% | Top of the pack for RD yield among private banks. |
| AU Small Finance Bank | 7.25% – 8.50% | Often higher (varies) | Small-finance bank with competitive RD rates. |
| Equitas Small Finance Bank | Up to 8.20% p.a. | Typically 8.25% – 8.70% p.a. | Among the highest yielding RD accounts in 2025. |
| Other Scheduled/Regional Banks (e.g. Karnataka Bank, Federal Bank, etc.) | 6.50% – 7.40% p.a. (varies by bank/tenure) | Typically +0.50% over general rate | Rates vary — check bank’s RD schedule before investing. ⚠️ |
Note: The ranges above represent typical interest slabs, combining shorter and longer tenures. RD rates may differ based on tenure, deposit amount, frequency of compounding, and senior citizen status. Always confirm with your bank’s official rate schedule before investing.
Calculating the maturity amount of a Recurring Deposit (RD) helps you know exactly how much you will receive at the end of the tenure. RD interest is typically compounded quarterly, and banks use a standard formula to compute the final maturity value.
M = R × ((1 + i)n − 1) / (1 − (1 + i)−1/3)
Where:
R = Monthly deposit amount
i = Interest rate / 4 (quarterly compounding)
n = Total number of quarters in the RD tenure
Monthly Deposit (R): ₹5,000
Tenure: 5 years (60 months)
Interest Rate: 7.5% p.a. (compounded quarterly)
Total Deposit: ₹5,000 × 60 = ₹3,00,000
Approx Maturity Value: ₹3,55,000
Interest Earned: ~₹55,000
An RD maturity calculator is the simplest way to estimate your final amount and choose the best RD plan based on your goals and savings capacity.
Choose RD if:
Consider alternatives if:
Most banks allow RDs starting from ₹100 to ₹500 per month. Post Office RD also has low minimum investment requirements, making RDs accessible for all income groups.
No. In a regular RD, the monthly installment amount remains fixed throughout the tenure. If you want flexibility, banks like ICICI, Kotak, and IDFC FIRST Bank offer flexible or variable RDs where deposits can vary.
Yes. Interest earned on RDs is fully taxable under “Income from Other Sources.” Banks may deduct TDS if the total interest exceeds the yearly threshold as per tax rules.
Yes, premature closure is allowed, but the bank will deduct a penalty (usually 1%–2%) from the applicable interest rate. Some banks may offer lower interest for early closure periods.
Small Finance Banks such as Equitas SFB, AU SFB, Jana SFB, and Suryoday SFB typically offer the highest RD rates in 2025, often above 7.5%–8% depending on tenure.
Yes. RD returns are fixed and do not depend on stock market movements. Bank RDs are covered under deposit insurance up to the permissible limit, and Post Office RDs are backed by the Government of India.
Missing an installment may result in a penalty depending on the bank’s policy. Some banks may also extend the tenure to compensate for the missed deposit. Automating payments via standing instructions avoids this issue.
Yes. Most banks allow a loan or overdraft of up to 80%–90% of the RD balance. This helps you meet emergency needs without breaking the RD prematurely.
In 2025, Recurring Deposits remain a cornerstone of safe, disciplined savings in India. For monthly savers, students, salaried individuals, retirees, and conservative investors, RDs offer predictability, safety, and ease of use. While yields may not be very high compared to market-linked instruments, the security and discipline they bring make RDs a valuable tool — especially for short- to medium-term financial goals. Just ensure you pick the right bank, tenure, and deposit amount, and stay aware of tax implications. With the right approach, RD can serve as a stable financial foundation for any investor.
Recurring Deposits (RDs) continue to be one of the most reliable and discipline-friendly savings instruments in India in 2025. For monthly savers who prefer guaranteed returns – without market risk – RDs remain a go-to option. This guide covers everything you need to know: how RDs work, latest rate trends, bank-wise comparisons, maturity calculations, tax considerations, pros & cons, and smart tips to maximize returns.
An RD is a savings and investment product offered by banks and post offices where you contribute a fixed amount every month for a predetermined period (tenure). The bank compounds interest (typically quarterly), and at maturity, you receive the total deposits plus interest earned. RDs are ideal for salaried people, regular income earners, and those wanting disciplined savings without market exposure.
Banks and post offices in India offer different types of RD accounts to suit various financial needs. Here are the main RD types available in 2025, along with who they are best suited for:
Each RD type caters to a specific need — whether it’s regular monthly savings, flexible deposits, senior citizen benefits, or NRI financial planning. Choosing the right RD account helps maximize returns and meet your individual savings goals.
Here is a detailed breakdown of the recurring deposit (RD) interest rates offered by leading banks and financial institutions in 2025 — for both general depositors and senior citizens. These figures are indicative and can vary by tenure, deposit amount, and periodic rate revisions. Always check the bank’s official website before investing.
| Bank / Institution | General RD Rate (Approx % p.a.) | Senior Citizen RD Rate (Approx % p.a.) | Remarks / Notes |
|---|---|---|---|
| State Bank of India (SBI) | 6.80% – 7.00% | 7.30% – 7.50% | Reliable public-sector bank; stable rates. |
| HDFC Bank | 7.00% – 7.25% | 7.50% – 7.75% | Popular private bank with flexible RD options. |
| ICICI Bank | 4.75% – 7.20% | 5.25% – 7.75% | Wide network, easy online RD opening. |
| Axis Bank | 5.75% – 7.20% | 6.25% – 7.85% | Decent yields among private banks. |
| Bank of Baroda (BoB) | 5.75% – 7.25% | 6.25% – 7.75% | Public bank; widely accessible. |
| Punjab National Bank (PNB) | 6.05% – 7.30% | 6.55% – 7.80% | Often competitive mid-term rates. |
| Canara Bank | 6.15% – 7.25% | 6.65% – 7.75% | Public-sector coverage in many regions. |
| Indian Bank | ≈ 6.70% p.a. | ≈ 7.20% p.a. | Standard RD scheme on offer. |
| Axis / Private-Sector Mid Banks (e.g. RBL, IndusInd) | ≈ 7.00% – 7.99% p.a. | Up to ≈ 8.25% p.a. | Often offer higher yields, but check deposit-insurance limits. |
| Yes Bank | 7.25% – 8.00% | 7.75% – 8.50% | Top of the pack for RD yield among private banks. |
| AU Small Finance Bank | 7.25% – 8.50% | Often higher (varies) | Small-finance bank with competitive RD rates. |
| Equitas Small Finance Bank | Up to 8.20% p.a. | Typically 8.25% – 8.70% p.a. | Among the highest yielding RD accounts in 2025. |
| Other Scheduled/Regional Banks (e.g. Karnataka Bank, Federal Bank, etc.) | 6.50% – 7.40% p.a. (varies by bank/tenure) | Typically +0.50% over general rate | Rates vary — check bank’s RD schedule before investing. ⚠️ |
Note: The ranges above represent typical interest slabs, combining shorter and longer tenures. RD rates may differ based on tenure, deposit amount, frequency of compounding, and senior citizen status. Always confirm with your bank’s official rate schedule before investing.
Calculating the maturity amount of a Recurring Deposit (RD) helps you know exactly how much you will receive at the end of the tenure. RD interest is typically compounded quarterly, and banks use a standard formula to compute the final maturity value.
M = R × ((1 + i)n − 1) / (1 − (1 + i)−1/3)
Where:
R = Monthly deposit amount
i = Interest rate / 4 (quarterly compounding)
n = Total number of quarters in the RD tenure
Monthly Deposit (R): ₹5,000
Tenure: 5 years (60 months)
Interest Rate: 7.5% p.a. (compounded quarterly)
Total Deposit: ₹5,000 × 60 = ₹3,00,000
Approx Maturity Value: ₹3,55,000
Interest Earned: ~₹55,000
An RD maturity calculator is the simplest way to estimate your final amount and choose the best RD plan based on your goals and savings capacity.
Choose RD if:
Consider alternatives if:
Most banks allow RDs starting from ₹100 to ₹500 per month. Post Office RD also has low minimum investment requirements, making RDs accessible for all income groups.
No. In a regular RD, the monthly installment amount remains fixed throughout the tenure. If you want flexibility, banks like ICICI, Kotak, and IDFC FIRST Bank offer flexible or variable RDs where deposits can vary.
Yes. Interest earned on RDs is fully taxable under “Income from Other Sources.” Banks may deduct TDS if the total interest exceeds the yearly threshold as per tax rules.
Yes, premature closure is allowed, but the bank will deduct a penalty (usually 1%–2%) from the applicable interest rate. Some banks may offer lower interest for early closure periods.
Small Finance Banks such as Equitas SFB, AU SFB, Jana SFB, and Suryoday SFB typically offer the highest RD rates in 2025, often above 7.5%–8% depending on tenure.
Yes. RD returns are fixed and do not depend on stock market movements. Bank RDs are covered under deposit insurance up to the permissible limit, and Post Office RDs are backed by the Government of India.
Missing an installment may result in a penalty depending on the bank’s policy. Some banks may also extend the tenure to compensate for the missed deposit. Automating payments via standing instructions avoids this issue.
Yes. Most banks allow a loan or overdraft of up to 80%–90% of the RD balance. This helps you meet emergency needs without breaking the RD prematurely.
In 2025, Recurring Deposits remain a cornerstone of safe, disciplined savings in India. For monthly savers, students, salaried individuals, retirees, and conservative investors, RDs offer predictability, safety, and ease of use. While yields may not be very high compared to market-linked instruments, the security and discipline they bring make RDs a valuable tool — especially for short- to medium-term financial goals. Just ensure you pick the right bank, tenure, and deposit amount, and stay aware of tax implications. With the right approach, RD can serve as a stable financial foundation for any investor.
