If you're looking for an affordable way to save for the long term, recurring deposits (RDs) are a popular option. With RDs, you can invest money through monthly, quarterly, half-yearly, or annual installments and earn interest, similar to fixed deposits (FDs). Many financial institutions, including banks and post offices, offer recurring deposit accounts to both salaried and non-salaried individuals.
While the basic features of recurring deposits are quite similar, there are differences, especially in interest rates and other benefits. Post offices and banks have their own sets of interest rates for recurring deposits.
Today, we'll focus on 5-year recurring deposit schemes and compare the interest rates offered by post offices with those provided by banks like the State Bank of India (SBI) and HDFC Bank.
Recurring Deposits: Interest Rates The government has recently increased the interest rates on 5-year recurring deposit schemes for the December quarter, bringing them up to 6.7%. These rates are applicable to both SBI and HDFC Bank. SBI offers interest rates ranging from 5.75% to 7% on RDs maturing in 1 year to 10 years, while HDFC Bank offers rates between 4.50% and 7% on RDs maturing in 6 months to 10 years.
Let's compare the interest rates of post office RDs with those of SBI and HDFC RDs:
India Post: As per information on the India Post website, individuals interested in opening a 5-year recurring deposit account can do so by depositing a minimum of Rs 100 per month or in multiples of 10. The latest rates offer an interest rate of 6.7% per annum, compounded quarterly.
State Bank of India (SBI): SBI provides an interest rate ranging from 6.50% to 6.80% per annum for regular depositors and 7% to 7.50% for senior citizens. You can start an RD account with SBI with a minimum deposit of Rs 100 for a tenure of 1 year to 10 years.
HDFC Bank: According to HDFC Bank, interest rates on recurring deposits vary from 4.5% to 7% for general customers and 5% to 7.75% for senior citizens. To open an RD account with HDFC bank, you'll need a minimum deposit of Rs 1,000, and the tenures can range from 6 months to 10 years.
