SBI vs Post Office recurring deposits (RDs): Latest interest rates and other details2 min read . Updated: 07 Oct 2019, 08:38 AM IST
- An RD account allows you to deposit a pre-specified amount at pre-decided intervals
- The installment amount once fixed, cannot be altered for a RD account
A recurring deposit (RD) account is a good way of making periodic investments. RD accounts fetch you more interest than savings bank accounts. RD is a type of term deposit offered by banks. RD schemes allow customers to build up their savings through regular monthly deposits of fixed sum over a fixed period of time. An RD account allows you to deposit a pre-specified amount at pre-decided intervals. The installment amount once fixed, cannot be altered. An RD account can be opened with a bank or post office. Both State Bank of India (SBI) and Post Office offer RD options to their customers.
Here is a comparison of RD accounts offered by SBI and post office:
1) State Bank of India or SBI has lowered the interest rate on recurring deposits (RDs) effective from 10th September 2019. SBI RD interest rates vary between 5.80%-6.25% for general public and an additional interest rate hike of 50 basis points for senior citizens. Post Office RDs offer a quite high interest rate of 7.2% per annum, compounding quarterly. These rates are effective from 1st October.
2) SBI recurring deposits have maturity ranging from 1 year to 10 years, but Post Office offer RDs for a tenure of 5 years only.
3) An SBI RD account can be opened by cheque/cash, but an RD account in a Post Office can be opened by cash only.
4) You can open an SBI RD account online through net banking facility, but for opening a post office RD account you have to visit the Post Office branch.
5) In SBI RD account, customers are required to make monthly deposits of minimum of ₹100 and in multiples of ₹10. There is no maximum limit on the deposits. But the minimum amount required for opening a Post Office RD is ₹10 per month, or any amount in multiples of ₹5. However, there is no maximum limit on investment.
6) The government decides the 5-year RD rate for Post Office. However, for SBI, the interest rates vary from tenure to tenure and these days the banks are revising them on a regular basis after the RBI rate cut.
7) SBI RD account can be started with a minimum monthly deposit of ₹100. However, there is no maximum limit. But the minimum amount required for opening a post office RD is Rs10 per month, or any amount in multiples of ₹5. However, there is no maximum limit on investment.