Recurring deposit interest rates: Post Office, SBI, HDFC Bank 5-year RD rates compared

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small savings schemes. Just like fixed deposits (FDs), recurring deposits (RDs) are also popular investment tools among people, especially salaried and senior citizens. The recurring deposit scheme provides an opportunity to build up savings through regular monthly deposits of fixed sum over a period of time.

The government has raised the interest rate on the five-year recurring deposit scheme to 6.7 per cent from 6.5 per cent for the December quarter. SBI offers an interest rate ranging from 5.75%-7% on RDs maturing in one year to ten years. These rates are effective from February 15, 2023.

HDFC Bank offers an interest rate ranging from 4.50%-7% on RDs maturing in six months to ten years. These rates are effective from January 24, 2023. Post Office- 6.7% SBI- 6.50% HDFC Bank- 7% SBI recurring deposits have maturity ranging from 1 year to 10 years.

HDFC Bank offers RD ranging from six months to 120 months (10 years). Post Office offers RDs for a tenure of 5 years only. An SBI or HDFC Bank RD account can be opened by cheque/cash, but an RD account in a Post Office can be opened by cash only.

Investments in bank RD are not exempt from taxation under Section 80C of the Income Tax Act of 1961. However, post office term deposit of 5 years is eligible for tax deduction under Section 80C of the Income Tax Act, 1961. Consequently, purchasing post office TDS gives the investor tax savings of up to ₹1.5 lakh.