A Recurring Deposit (RD) with IDBI lets you deposit a fixed amount every month and earn a fixed return at maturity. RDs help build a disciplined saving habit while offering interest rates comparable to fixed deposits. The table below provides representative RD interest rates of leading banks for 2025 so you can benchmark your bank’s offering.
| Bank | General rate (p.a.) | Senior citizen rate (p.a.) |
|---|---|---|
| Punjab National Bank | 6.50% | 7.30% |
| City Union Bank | 6.50% | 6.75% |
| Bank of India | 6.50% | 7.25% |
| Canara Bank | 6.90% | 7.40% |
| Indian Bank | 6.70% | 7.20% |
| Bank of Baroda | 7.05% | 7.55% |
| Central Bank of India | 6.75% | 7.25% |
| Karur Vysya Bank | 7.00% | 7.40% |
| Union Bank of India | 6.70% | 7.20% |
Features and benefits of recurring deposits
- Systematic savings: RDs allow you to invest small amounts monthly instead of a large lump sum.
- Flexible tenures: Tenures typically range from 6 months to 10 years.
- Guaranteed returns: The interest rate is fixed when the RD is opened and remains unaffected by market movements.
- Low minimum instalments: Many banks allow monthly contributions from as low as ₹100, making RDs accessible to all.
- Nomination and premature withdrawal: You can nominate a beneficiary; premature withdrawal is allowed but may attract a small penalty.
Recurring deposit interest income is fully taxable. You should provide your PAN to avoid higher TDS; interest up to ₹40,000 (₹50,000 for seniors) is exempt from tax deduction at source. Remember to verify the latest rates on your bank’s website before opening an RD.
