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.

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