Similar to Fixed Deposits (FD) offered by banks and post offices, Recurring Deposits (RD) are also available as an investment option. By investing in RD, you have the opportunity to earn substantial profits. Many banks are currently offering up to 10% interest on RDs.
If you prefer guaranteed returns without taking excessive risks, RD is an ideal investment choice. It is favored by risk-averse investors as the chances of losing the invested money in RD are minimal. Banks provide the option to open RD accounts for durations ranging from one year to 10 years, making it a flexible choice that can also be utilized in emergencies. Recently, the interest rates on recurring deposits have reached close to 10%.
RDs serve as debt instruments, ensuring the safety of your capital. They are an effective means of accumulating funds in the short term. The key advantage of RDs is the ability to deposit small amounts each month. However, it is important to note that RD returns are generally lower than the inflation rate.
Fixed Deposit (FD) and Recurring Deposit (RD) Offer Similar Interest Rates
In most cases, the interest rates for fixed deposits and recurring deposits are the same. In May 2023, Suryoday Small Finance Bank (SSFB) announced an interest rate of 9.6% on 5-year FD/RD for senior citizens. Unity Small Finance Bank is also offering 9.5% interest to senior citizens. Even common citizens can earn significant interest rates at these banks, with the highest FD/RD interest rate being around 9%.
Let’s take a look at the interest rates offered by different banks:
1. Suryoday Small Finance Bank (SSFB) provides 9.6% interest on 5-year RD for senior citizens. For common citizens, the interest rate on RD is 9.1%.
2. Unity Small Finance Bank offers up to 9.5% interest on deposits of 1001 days and 8.15% interest on 5-year RD for senior citizens. For common citizens, the interest rates are 9.1% on 1001 days deposit and 7.65% on 5-year RD.
3. State Bank of India (SBI) provides 7.5% interest on 5-year RD for senior citizens. For common citizens, the interest rate on RD is 6.6%.
4. HDFC Bank, a private sector bank, offers 7.5% interest on 5-year RD for senior citizens. For common citizens, the interest rate on RD is 7%.
5. ICICI Bank provides 7.5% interest on 5-year RD for senior citizens. For others, the interest rate on 5-year RD is 6.9%.