Recurring deposits (RDs) remain one of the most preferred saving instruments for individuals seeking disciplined monthly investments with predictable returns. Understanding RD interest rates across banks and tenures can help you make informed decisions and maximize your maturity amount in 2026.
This guide covers bank-wise recurring deposit rates, tenure-based comparisons, Post Office RD, examples using an RD calculator, and frequently asked questions on choosing the best RD plan.
What Are Recurring Deposit Rates and How Do They Work?
Recurring deposit rates are the interest returns offered on monthly investments over a fixed tenure. Unlike fixed deposits, RDs allow small, consistent monthly deposits while providing compounded interest, usually credited quarterly.
Key Points to Know:
- Rates vary by bank and tenure
- Senior citizens typically get higher returns
- Longer tenures may offer slightly better rates
- Monthly deposits encourage disciplined savings
Bank-Wise RD Interest Rates 2026 (With Tenure)
Here is a tenure-wise comparison of recurring deposit rates for top banks and Post Office:
| Bank | Tenure | General Public | Senior Citizens |
| SBI | 1–2 Years | 6.80% | 7.30% |
| SBI | 3–5 Years | 7.00% | 7.50% |
| ICICI Bank | 6–12 Months | 6.70% | 7.20% |
| ICICI Bank | 2–5 Years | 7.10% | 7.60% |
| Karur Vysya Bank (KVB) | 1–3 Years | 6.75% | 7.25% |
| KVB | 3–5 Years | 7.25% | 7.75% |
| Indian Overseas Bank (IOB) | 1–3 Years | 6.90% | 7.40% |
| IOB | 3–5 Years | 7.10% | 7.60% |
| Post Office RD | 5 Years | 6.70% | 6.70% |
Disclaimer: Interest rates are indicative and may change without prior notice. Verify rates on official bank or Post Office websites before investing.
Highest RD Returns Across Banks
The highest RD returns vary based on:
- Tenure selected
- Senior citizen benefits
- Bank-specific schemes
Public sector banks like SBI provide stability, while private and regional banks may offer slightly higher rates for select tenures. Post Office RD is suitable for conservative investors seeking guaranteed government-backed returns.
RD Calculator: Estimate Your Maturity Amount
An RD calculator helps estimate maturity value based on:
- Monthly deposit amount
- Tenure selected
- Applicable RD interest rate
Example: RD ₹2,000 per Month for 5 Years
| Monthly Investment | Tenure | Interest Rate | Total Investment | Approx. Maturity Value |
| ₹2,000 | 5 Years | 6.70% | ₹1,20,000 | ₹1,42,000 |
| ₹2,000 | 5 Years | 7.00% | ₹1,20,000 | ₹1,44,500 |
| ₹2,000 | 5 Years | 7.50% | ₹1,20,000 | ₹1,47,800 |
Disclaimer: Maturity values are approximate and depend on compounding frequency and bank-specific calculation methods.
Post Office RD: Features and Suitability
Post Office RD offers guaranteed returns for a fixed tenure, typically 5 years. While rates may be slightly lower than some banks, it is suitable for:
- Conservative, risk-averse investors
- Long-term savings
- Senior citizens seeking stable returns
Use a Post Office RD calculator to estimate maturity before investing.
RD vs FD: Which is Better?
| Feature | Recurring Deposit | Fixed Deposit |
| Investment Style | Monthly deposits | Lump sum |
| Entry Amount | Low | High |
| Saving Discipline | High | Medium |
| Flexibility | Better for salaried earners | Better for lump-sum investors |
RDs are ideal for individuals who want to save regularly without blocking a large amount at once.
Which Bank Gives the Best RD Rates?
The best bank for RD depends on your goals:
- Short-term savings: 6–12 month bank RD
- Medium-term planning: 1–3 year bank RD
- Long-term disciplined saving: 5-year RD or Post Office
- Senior citizens: Bank RD with higher senior citizen rates
Interest is important, but also consider withdrawal rules, penalties, and account management flexibility.
Frequently Asked Questions (FAQs)
Q1. Why do RD interest rates vary across banks?
Banks set rates based on liquidity requirements, deposit tenure, and funding strategies.
Q2. Which RD tenure gives the best returns?
Longer tenures typically offer slightly higher returns, but flexibility should also be considered.
Q3. Is RD safer than other investment options?
Yes, RDs are low-risk, with predictable returns, unlike market-linked instruments.
Q4. Can RD interest rates change during the tenure?
No, once booked, most RDs offer fixed rates for the chosen tenure.
Q5. How does RD compare with FD?
RD is better for monthly savings; FD is better for lump sum investments with higher potential interest.
Important Disclaimers
- This article is for informational purposes only.
- RD interest rates, tenure, and schemes are subject to change by banks or Post Office without notice.
- Readers should verify rates and terms on official sources before investing.
- Maturity values and returns are approximate and may vary based on compounding and bank-specific calculation methods.
Conclusion
Understanding RD interest rates and comparing tenure-wise options can help you choose the most suitable recurring deposit in 2026. Using an RD calculator and reviewing senior citizen benefits ensures better long-term returns. Whether you prefer the stability of Post Office RD or the flexibility of bank RDs, informed decisions can strengthen your savings strategy.
Disclaimer:
This blog is intended for informational purposes only. It is not affiliated with, sponsored by, or endorsed by any bank or financial institution mentioned. Banking services, processes, and contact details may change over time. Readers are advised to verify the latest information through official sources before taking any action.
