Recurring Deposit (RD) is a special type of Fixed Deposit in which a fixed amount is deposited every month or annually. It gives almost the same interest that is available in an FD.
These types of deposits also mature on a fixed date. Banks offer RD for a period of one to 10 years. It allows investors to invest a fixed amount every month and build a corpus for short term needs. It works like a Systematic Investment Plan (SIP) of a mutual fund. Investing in RD brings discipline.
However, for this it is also necessary that you have the required amount of money to invest every month. Conservative investors who have a source of regular income can consider RD. After 6 consecutive rate hikes by the Reserve Bank of India (RBI) in FY23 starting May, many banks have increased the interest rates on RDs for 5 years tenure.
Let us know about some such banks which are giving better returns on RD of 5 years.
IndusInd Bank
IndusInd Bank gives 7.25 per cent interest on RD for a tenure of five years. If you invest Rs 5,000 every month for five years, you will get Rs 3.62 lakh at the end of the tenure.
AU Small Finance Bank and Ujjivan Small Finance Bank
AU Small Finance Bank and Ujjivan Small Finance Bank are paying 7.20 per cent interest on RD for a period of five years. If you invest Rs 5,000 every month, you will get Rs 3.62 lakh in tenure.
DCB Bank
DCB Bank gives 7.60 per cent interest on RD for a period of five years. Among private banks, this bank offers the best interest rates. If you invest Rs 5,000 every month for five years, you will get Rs 3.66 lakh when the amount matures after 5 years.
Suryoday Small Finance Bank
Suryoday Small Finance Bank is paying 7.5 per cent interest for a tenure of five years. Suryodaya is offering the best best interest rates in Small Finance Bank. If you invest Rs 5,000 every month for five years, you will get Rs 3.65 lakh at the end of the tenure (5 years).
Big private banks are paying so much interest
Major private banks, including Axis Bank, HDFC Bank and ICICI Bank, are offering 7 per cent interest on RDs for a period of five years. Other small private banks, including IDFC First Bank, RBL Bank and Yes Bank, are offering 7% interest on RDs with a tenure of 5 years. If you invest Rs 5,000 every month, you will get Rs 3.60 lakh at the end of the tenure.
