Just like fixed deposits or FD that have fixed interest rates and tenure, banks offer another type of term deposit known as a recurring deposit (RD) where a specified amount can be deposited at pre-decided intervals.
The instalment amount once fixed, cannot be altered. Customers can open an RD account in any bank or the post office.
Recurring deposit rates in SBI and post office:
-For the general public, RD interest rates in SBI currently vary between 5 -5.4 percent. Senior citizens get an additional interest of 50 basis points. These rates are effective from January 8, 2021. RD interest rates in Post Office are at 5.8 percent per annum, compounding quarterly. These rates are effective from January 1, 2021.
-Maturity of SBI recurring deposits ranging from 1 year to 10 years and Post Office RDs have a tenure of 5 years only.
-Through cheque/cash, an SBI RD account can be opened. However, cash is the only way through which D account in a Post Office can be opened.
-Through net banking facility, SBI RD account can be opened online. Post Office branch has to be visited for opening a post office RD account.
-Customers are required to make monthly deposits of a minimum of Rs 100 and in multiples of Rs 10 in SBI RD account. There is no maximum limit on the deposits. The minimum amount required for opening a Post Office RD is Rs 10 per month or any amount in multiples of Rs 5. However, there is no maximum limit on investment.
-5-year RD rate for Post Office had been decided by the government and the interest rates vary from tenure to tenure for SBI.
Here are the SBI recurring deposit rates| 1 year to less than 2 years | 4.9% |
| 2 years to less than 3 years | 5.1% |
| 3 years to less than 5 years | 5.3% |
| 5 years and up to 10 years | 5.4% |
Here are the 5-year Post Office recurring deposit account (RD)
5.8 percent per annum (quarterly compounded)