1 min read.Updated: 27 Apr 2019, 09:30 AM ISTLivemint
SBI recurring deposit has terms ranging from 12 months to 120 months
Generally, banks offer higher rates when the RD tenure is above 15 months
New Delhi: State Bank of India (SBI) offers several types of deposit schemes for short-term and long-term investments. Fixed deposits (FDs) and recurring deposits (RDs) are two such products offered by SBI that earn higher interest rates. RD is a kind of term deposit which allows the investor to invest a fixed amount of funds every month. You get a fixed rate of return on RDs, which depends on the amount of investment and tenure.
The benefit in RDs is that you would get the same interest rate even on the last installment that you may pay after a year even if the rates are lower. Generally, banks offer higher rates when the RD tenure is above 15 months. SBI RD account can be started with a minimum monthly deposit of ₹100 and in multiples of ₹10. However, there is no maximum limit.
SBI recurring deposit has terms ranging from 12 months to 120 months. SBI RD interest rates vary between 6.40% and 6.85% for regular customers and an additional interest rate hike of 0.50 percentage points for senior citizens. For instance, SBI’s 1-year recurring deposit will fetch you a 6.8% interest rate. For the same period, senior citizens will earn 7.30% per annum. For the term period of 1-2 years, the rate of return is 6.8% for general citizens and 7.3% for senior citizens.
For medium-term tenure (3-5 years), the rate of return offered by SBI is 6.80% for general citizens and for long-term investments (5-10 years), the rate of return is 6.85%.
For senior citizens, SBI’s rate of return on RD account is 0.50 percentage points more than that for regular citizens. For a medium-term tenure, the rate of interest for the recurring deposit scheme is 7.3% and for long term tenure, it is 7.35%.