Opening RD account this Diwali? Learn how Rs 1,000, Rs 7,000, Rs 21,000 monthly deposits grow at SBI, Canara Bank, Post Office with examples

Recurring Deposit Interest Rate 2024: Are you planning to set up a recurring deposit (RD) this Diwali? A recurring deposit scheme works similarly to a term or fixed deposit, allowing depositors to build wealth at a pre-determined interest rate over a set period, such as 10 years. Like an FD, an RD is a fixed-income instrument, but with a key difference: contribution. An FD requires a one-time, lump sum deposit, whereas an RD lets investors spread deposits at regular intervals, typically monthly. Many prefer RDs over FDs as they avoid blocking large sums at once. This is because committing a fraction of monthly income to a long-term investment is easier than paying a lump sum upfront. In this article, let's compare the long-term returns of Rs 1,000, Rs 7,000 and Rs 21,000 recurring deposits at some of the popular PSU banks to help you decide accordingly.

What makes an RD unique is that it provides the means for investors to grow their money more safely and conveniently than in equities.

Recurring Deposit Interest Rates vs Fixed Deposit Interest Rates 

Here are the latest interest rates offered by PSU banks such as SBI, as of October 30: 

The Post Office Recurring Deposit scheme is available at a fixed maturity period of 5 years, offering an interest rate of 6.7 per cent to all depositors, according to the India Post website. 

Now, let's take a few examples to understand these RD interest rates better. 

Learn About RD Interest With Examples | SBI, BoB, Post Office, other lenders pay these returns now

Rs 1,000/month RD at SBI in 3 years

For example, a recurring deposit of Rs 1,000 per month in a three-year scheme at SBI will help the deposit grow a sum of Rs 36,000 (in three years) to Rs 39,980 for the general public and Rs 40,294 for senior citizens. 

Rs 7,000/month RD at Canara Bank in 5 years

Similarly, an RD of Rs 7,000 per month in a five-year Canara Bank scheme will turn the total investment of Rs 4,20,000 (in five years) into Rs 4,99,564 for the general public and Rs 5,06,199 for senior citizens with interest earned at Rs 86,199. 

Rs 21,000/month RD at Post Office in 10 years 

A five-year RD scheme at the designated Post Office branches will earn interest of Rs 2,38,682 on the total investment of Rs 12,60,000 at maturity.

In other words, a sum of Rs 12.6 lakh will grow to Rs 14,98,682 in the five-year scheme.  

Remember that these examples are for illustrative purposes based on calculations showing estimates based on the current interest rates. 

When is Diwali in 2024?

Diwali is celebrated over several days across the country with dates varying in different locations. 

This year, astrologers are divided over two dates to celebrate Diwali: October 31 and November 1. 

However, stock exchanges BSE and NSE are scheduled to conduct a special, one-hour Muhurat trading session from 6 pm on November 1.  

Banks will be closed in several parts of the country on both dates, with some city branches observing holidays on both days.

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