Recurring Deposit can be a good approach for those who are looking to save on monthly basis. Ideal for those who are risk averse and looking for decent returns.
Interest earned on RDs are not tax free, so it is best for people who fall in lower income tax bracket.
If one wants to avoid TDS on RDs can do so by investing in Post Office Recurring Deposits.
Post Office recurring deposit offers interest rates at 8.4 per cent which is compounded quarterly.
In Union Budget 2015, the finmin notified that TDS will be applicable on the bank recurring deposits and calculated as per tax slabs. However, not applicable on post office RDs.
Latest Interest rates on Recurring deposits
|Bank name||Tenure||Interest Rate|
|Bank Of India||1 year-3 years||8.25 percent|
|State Bank of Hyderabad||2 years||8.50 percent|
|Andra Bank||1-2 years||8.25 percent|
|Allahabad Bank||2-5 years||8.25 percent|
|Ratnakar Bank||1-2 years||8.85 percent|
|Yes Bank||1-5 years||8.25 percent|
|Karnataka Bank||1 year||8.35 percent|
|Lashmi Vilas bank||1 year||8.60 percent|
|DCB Bank||2-5 years||8.60 percent|
|Central Bank of India||1 year||8.35 percent|
|Dhanalakshmi Bank||1-2 years||8.30 percent|
|Indus Ind Bank||1 year||8.35 percent|
Note that interest rates tend to change without notification. Please verify from the respective bank before locking the amount.