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Saving money is an important criterion for every individual. With HDFC’s Recurring Deposit option, you can now save money in regular installments and earn interest on your payments. For more details on HDFC’s Recurring Deposit, read on!

HDFC RD Interest Rates for different Investment Periods

Investment period RD rates for regular deposit RD rates for Senior Citizens
6 Months 5.75% 6.25%
9 Months 6.00% 6.50%
12 Months 6.75% 7.25%
15 Months 6.25% 6.75%
24 Months 6.25% 6.75%
27 Months 6.00% 6.50%
36 Months 6.00% 6.50%
39 Months 6.00% 6.50%
48 Months 6.00% 6.50%
60 Months 6.00% 6.50%
90 Months 6.00% 6.50%
120 Months 6.00% 6.50%

Recurring Deposit – Interest Rates

  • HDFC Bank offers RD interest rates start at 5.75% and can go up to 7.25% (for senior citizens)
  • Interest on HDFC Bank RD amount is compounded quarterly
  • HDFC Bank accepts minimum deposits starting at Rs. 1,000, up to a maximum of 14,99,900
  • For senior citizens, HDFC Bank offers RD rate up to 7.25% for RD of tenure up to 12 months

HDFC Bank Recurring Deposit

Special Features – HDFC Recurring Deposit

  • HDFC does not penalize users for delayed payments
  • The bank offers a nomination facility
  • The deposit tenure of the RD can range from 6 months to 120 months
  • The minimum monthly amount can be deposited in multiples of Rs. 5
  • Since this service is available at every HDFC Bank branch, you can visit your nearest branch to avail this service

Recurring Deposit or SIP: What Is a Better Way to Save?

It is important to create a rainy-day fund for emergencies and saving a small amount every month can go a long way in ensuring you are well covered for the future. A Recurring Deposit is one way of creating this emergency fund. However, it is not the best way to make money of your surplus savings. If you are comfortable with depositing money in regular installments, then you can also opt for a Mutual Fund as SIP (Systematic Investment Plan) to create more wealth.

Mutual Fund SIPs: Why They Work

The minimum deposit amount can be as low as Rs. 500 for a Mutual Fund. In fact, you can choose plans where the deposits are made every quarter, or every month as per your convenience

  • Mutual Funds invest in debt or equity funds. If we look at the last 10 years, Equity Linked Mutual Funds (ELSS) have performed very well in the market with an average return rate of 12-22%. This is much higher than the average RD interest rates
  • You are not charged a withdrawal penalty when you withdraw money from your SIP account. Thus, a SIP has higher liquidity when compared to RD accounts
  • The interest gains from RD accounts is taxable. On the contrary, gains from SIPs which invest in Equity Linked Mutual Funds (ELSS) are exempt from tax

Eligibility Criteria

  • You must be an Indian resident or a HUF (Hindu Undivided Families) to open an account
  • If you are an NRI, you can also open an RD account through NRO and NRE accounts
  • If a minor, you can open an RD account under the guardianship of your parents who will be the supervisor of your finances

Premature Withdrawal

HDFC Bank has some rules for users who wish to prematurely withdraw money from their RD account. However, partial withdrawal of the amount is not allowed.

Tax Benefits on HDFC Recurring Deposit

All Recurring Deposits, including HDFC Recurring Deposit, are taxable under the Income Tax Act 1961. The money that is invested in the RD account is counted as part of your yearly income and a TDS (Tax Deducted at Source) of 10% is applicable on the interest earned (if it is in excess Rs. 10,000 for the financial year). To save TDS on your RD gains, you can fill either Form 15G or Form 15H.

Conditions for submitting Form 15G:

  • You must be an individual or HUF
  • You must be a Resident Indian
  • You should be less than 60 years old
  • Tax calculated on your Total Income is nil
  • The total interest income for the year is less than the minimum exemption limit for that year, which is Rs 2,50,000 for the financial year 2016-17

Conditions for submitting Form 15H:

  • You are an individual
  • You must be a Resident Indian
  • You are 60 years old or will be 60 years old during the year for which you are submitting the form
  • Tax calculated on your Total Income is nil

Documents Required to Open HDFC RD Account

1. Proof of Identity

  • Passport
  • PAN card
  • Voter ID card
  • Driving licence
  • Government ID card
  • Photo ration card
  • Senior citizen ID card
  1. Address proof
  • Passport
  • Telephone bill
  • Electricity bill
  • Bank Statement with Cheque
  • Certificate/ ID card issued by Post office

Types of Recurring Deposit offered by HDFC

HDFC Bank offers two different types of Recurring Deposit schemes. These are:

Regular Scheme: This is a normal RD account that is created for the general purpose of saving money. The tenure of this account can go up to 10 years, and the minimum monthly investment amount can range from Rs. 1000 to Rs. 14,99,900 per month. For an NRI user, the minimum tenure is 12 months.

NRE Recurring Deposit Scheme: This is an excellent way for NRIs to invest and save money for the long term. This RD account has the same interest rate as an NRE fixed deposit account. The principal and interest from the RD account are both tax-free (in India) and the total is fully repatriable.

RD Interest Rates in India

The RD interest rate in India can vary from bank to bank and depends on the kind of RD scheme chosen, the tenure of deposit, and the monthly deposit amount. Generally, the interest rates are higher when the RD tenure is above 15 months. Also, some banks may offer high RD interest rates for senior citizens and women.

Choose your preferred bank below to know more about the RD interest rate it offers:

State Bank of India HDFC Bank ICICI Bank Axis Bank
Indian Bank RBL Bank IDBI Bank IDFC Bank
Corporation Bank Andhra Bank PNB Bank Canara Bank
Union Bank of India Central Bank Bank of India Bank of Baroda
Syndicate Bank Allahabad Bank Kotak Mahindra Bank

 

2x higher returns than FD / RD

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