Banks Offering Up To 9% Interest On RDs

RDs are the most conventional form of investment that involves deposit of some fixed amount on a regular basis for some pre-determined time period. Usually the time period for such deposits stretch for long term say 5 to 10 years. The investment instrument is suitable for investors who have a steady flow of income and can service their liability towards the investment to earn a fixed rate of return.

Banks Offering Up To 9% Interest On RDs

So while the traditional public and private sector banks are not lucrative when it comes to return on RD instrument, you can earn a comparatively higher return by making your deposits in Small Finance Banks which have lately gaining traction through their best offers.

Here are suggested three such Small Finance Banks that offer a return as high a 9% on RDs

Suryoday Small Finance Bank

For a three year tenure, the RD with this small finance bank founded in the year 2008 can yield you as high as 8.75% return. And senior citizens have the benefit to earn a higher return by 0.5% points. The highest rate is offered on 27-months, 30-months, 33-months and 36-months RD.

Tenure	Interest rate for amount less than Rs. 1 crore
6 months	7.5%
9 months	7.75%
12 months	8.5%
15 months	8.5%
18 months	8.5%
21 months	8.5%
24 months	8.5%
27 months	8.75%
30 months	8.75%
33 months	8.75%
36 months	8.75%
Above 3 years to 5 years	7.75%
Above 5 years to 10 years	7.25%

In comparison, leading state-run lender offers merely 6.7 per cent interest on a three-year RD deposit.

Equitas Small Finance Bank: This bank has revised rates on RD with effect from July 5, 2018 and offer maximum 8% interest rate. Senior citizens are eligible for additional interest rate of 0.5%.

Tenure	Interest rate for amount less than Rs. 1 crore
12 months	8%
15 months	8%
18 months	8%
21 months	7.75%
24 months	7.75%
30 months	7.75%
36 months	7.75%
48 months	7%
60 months	7%
90 months	7%
120 months	7%]

This small finance bank offers up to 8 per cent interest on recurring deposits. The highest rate is applicable on 12-month, 15-month and 18-month tenures. For senior citizens, this bank offers 0.5 per cent additional interest on all tenures of RD.

AU Small Finance Bank offers interest rate in the range of 6.75-8 per cent on various tenures of RDs. The lowest rate of 6.75 per cent is offered on a 3-month RD while the highest rate of 8 per cent is given on 46-60 month RDs. Senior citizens will get 50 basis points more on all tenures of RDs.Taxation on recurring deposits

Taxation on Recurring deposits: These are not tax efficient. Interest income from recurring deposit is added to total income for the purpose of declaring tax liability.

Also, there is now a TDS that will be applicable on recurring deposits if the interest income exceeds Rs 10,000.

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