Recurring deposit interest rates: Post Office, SBI, HDFC Bank 5-year RD rates compared | Mint
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Business News/ Money / Personal Finance/  Recurring deposit interest rates: Post Office, SBI, HDFC Bank 5-year RD rates compared
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Recurring deposit interest rates: Post Office, SBI, HDFC Bank 5-year RD rates compared

RD interest rates: The recurring deposit scheme provides an opportunity to build up savings through regular monthly deposits of fixed sum over a period of time

Just like fixed deposits (FDs), recurring deposits (RDs) are also popular investment tools among people, especially salaried and senior citizens. (Pixabay)Premium
Just like fixed deposits (FDs), recurring deposits (RDs) are also popular investment tools among people, especially salaried and senior citizens. (Pixabay)

Recurring deposit interest rates: For the December quarter, the government increased the interest rate on the five-year recurring deposit scheme while retaining the rates for all other small savings schemes. Just like fixed deposits (FDs), recurring deposits (RDs) are also popular investment tools among people, especially salaried and senior citizens. The recurring deposit scheme provides an opportunity to build up savings through regular monthly deposits of fixed sum over a period of time. 

Post Office RD vs SBI RD vs HDFC Bank RD

The government has raised the interest rate on the five-year recurring deposit scheme to 6.7 per cent from 6.5 per cent for the December quarter. 

SBI offers an interest rate ranging from 5.75%-7% on RDs maturing in one year to ten years. These rates are effective from February 15, 2023.

HDFC Bank offers an interest rate ranging from 4.50%-7% on RDs maturing in six months to ten years. These rates are effective from January 24, 2023.

5-year RD rates compared: Post Office vs SBI vs HDFC Bank

Post Office- 6.7%

SBI- 6.50%

HDFC Bank- 7%

Post Office RD vs SBI RD vs HDFC Bank RD: Maturity

SBI recurring deposits have maturity ranging from 1 year to 10 years. HDFC Bank offers RD ranging from six months to 120 months (10 years). Post Office offers RDs for a tenure of 5 years only.

An SBI or HDFC Bank RD account can be opened by cheque/cash, but an RD account in a Post Office can be opened by cash only.

Post Office RD vs SBI RD vs HDFC Bank RD: Income tax benefits

Investments in bank RD are not exempt from taxation under Section 80C of the Income Tax Act of 1961. However, post office term deposit of 5 years is eligible for tax deduction under Section 80C of the Income Tax Act, 1961. Consequently, purchasing post office TDS gives the investor tax savings of up to 1.5 lakh.

 

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
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Published: 05 Oct 2023, 01:03 PM IST
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