Banks and post offices offer different interest rates on recurring deposits for general customers and senior citizens, based on the preferred tenures.
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One of the most affordable and popular ways of saving funds for a long tenure is recurring deposits or RDs, in which investors can make investments through monthly, quarterly, half-yearly, or annual installments and earn interest just like FDs. There are a lot of financial institutions including banks and post offices that offer recurring deposit accounts to customers including salary and non-salaried people.
While the features of recurring deposits are almost the same, there are a few things that certainly differ including the interest rates among other benefits. Post offices have a different set of interest rates on recurring deposits, while banks have their own set of interest rates.
Today, we will discuss 5-year recurring deposit schemes, comparing the interest rates provided by post offices and banks like the State Bank of India and HDFC Bank.
Recurring Deposits: Interest rates
Considering that the government has hiked the interest rates on 5-year recurring deposit schemes from 6.5 per cent to 6.7 per cent for the December quarter, these rates are also effective for both SBI and HDFC Bank. While SBI offers an interest rate between 5.75 per cent to 7 per cent on RDs maturing in 1 year to 10 years, HDFC Bank offers an interest rate between 4.50 per cent to 7 per cent on RDs maturing between 6 months to 10 years.
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If we draw a comparison between the interest rates of the aforementioned banks along with the post office, here are the current rates.
Post Office RDs vs SBI RD vs HDFC RD: Interest rates
India Post:
As stated by the India Post website, interested individuals willing to open a 5-year recurring deposit account can do so by depositing a minimum of Rs 100 per month or any other amount in the multiples of 10. As per the latest information, RD deposits are offered with an interest rate of 6.7 per cent per annum (quarterly compounded).
State Bank of India
State Bank of India provides an interest rate of 6.50 per cent to 6.80 percent per annum to normal depositors while an interest rate of 7 per cent to 7.50 per cent to senior citizens. Those willing to invest on an RD account can start with a minimum deposit of Rs 100 for tenure of 1 year to 10 years.
HDFC Bank
According to the HDFC Bank, the interest rates on recurring deposits range between 4.5 per cent to 7 per cent for general customers, and between 5 per cent to 7.75 per cent for senior citizens.
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Those willing to open an RD account with HDFC bank can do so with a minimum deposit of Rs 1,000 with tenures ranging from 6 months to 10 years.
