Recurring deposits (RDs) are a safe and disciplined way for individuals to grow their savings. They’re especially popular among salaried individuals and conservative investors who prefer fixed returns without the volatility of markets.
In this guide, we explore the best high interest recurring deposit (RD) schemes in India in 2025, compare top banks and NBFCs, and provide a smart strategy to maximize your RD returns.
📌 What is a Recurring Deposit (RD)?
A Recurring Deposit is a fixed investment scheme offered by banks and NBFCs where you deposit a fixed amount every month for a pre-defined tenure and earn interest on it.
✅ Key Features:
- Fixed monthly investment
- Interest compounded quarterly
- Tenure ranges from 6 months to 10 years
- Guaranteed returns
- Low risk and ideal for goal-based savings
🏆 Best High Interest Recurring Deposit Schemes – June 2025
Here’s a comparison of the highest RD interest rates offered by top banks and NBFCs as of June 2025:
🔝 Top 10 RD Schemes (General Public)
| Bank/NBFC | Interest Rate (p.a.) | Tenure Range |
|---|---|---|
| Jana Small Finance Bank | 8.35% | 1 to 5 years |
| Utkarsh SFB | 8.25% | 1 to 3 years |
| Equitas SFB | 8.00% | 1 to 3 years |
| Fincare SFB | 8.00% | 1 to 5 years |
| Suryoday SFB | 7.90% | 1 to 5 years |
| IndusInd Bank | 7.50% | 1 to 5 years |
| Yes Bank | 7.25% | 1 to 5 years |
| RBL Bank | 7.10% | 1 to 5 years |
| ICICI Bank | 7.00% | 6 months to 10 years |
| SBI | 6.80% | 1 to 10 years |
Note: Rates may vary based on tenure and are subject to periodic change.
👵🏻 Senior Citizen RD Rates – June 2025
Senior citizens enjoy 0.50% extra interest in most banks.
| Bank/NBFC | Senior Citizen Rate |
|---|---|
| Jana Small Finance Bank | 8.85% |
| Utkarsh SFB | 8.75% |
| Equitas SFB | 8.50% |
| SBI | 7.30% |
| HDFC Bank | 7.50% |
🧠 How to Choose the Best RD Scheme
When selecting a recurring deposit, consider the following factors:
1. Interest Rate
Look for banks offering above 7.5% to beat inflation and maximize returns.
2. Credit Rating & Safety
Prefer RBI-regulated banks with high credit ratings (like AAA or AA) from agencies such as CRISIL or ICRA.
3. Tenure Flexibility
Choose a bank that allows flexibility in tenure (1 to 5 years or more) depending on your goal.
4. Premature Withdrawal Rules
Some banks allow premature closure with a penalty. Always read the terms.
5. Digital Onboarding
Opt for banks that offer easy online RD creation and management through apps or net banking.
💰 How Much Will You Earn with an RD?
Let’s calculate the maturity amount for a ₹5,000 monthly RD over 3 years at 8.25% annual interest.
🧾 RD Maturity Calculation (Sample)
| Monthly Deposit | Tenure | Interest Rate | Maturity Amount |
|---|---|---|---|
| ₹5,000 | 3 years | 8.25% | ₹2,03,315 |
📌 Use online RD calculators or banking apps to check personalized results.
🛡️ Safety of Small Finance Banks (SFBs)
SFBs offer higher interest but are relatively less known. However, deposits up to ₹5 lakh (including interest) are insured by DICGC, making them safe for moderate investments.
🔄 RD vs Other Investment Options
| Instrument | Interest Rate | Liquidity | Taxable? | Risk Level |
|---|---|---|---|---|
| RD | 6.5–8.5% | Medium | Yes | Low |
| FD | 6.5–8.0% | Medium | Yes | Low |
| Mutual Funds | 10–15% (avg) | High | Depends | Medium–High |
| PPF | 7.1% (fixed) | Low (15 years) | Tax-free | Very Low |
| SIP in MF | 10–12% | High | Taxable | Medium |
📊 Benefits of Investing in High-Interest RDs
- ✅ Fixed returns (not affected by market fluctuations)
- ✅ Ideal for short-term and medium-term goals
- ✅ Encourages monthly savings discipline
- ✅ Low entry barrier (start with ₹500/month)
- ✅ Great for conservative investors and senior citizens
🧮 Smart Strategy to Maximize RD Returns
Here’s how to get the most out of your RD investments:
📝 Laddering Strategy:
Open multiple RDs with staggered maturity periods (e.g., 1-year, 2-year, 3-year). As each matures, reinvest at prevailing higher rates.
Example:
| RD No. | Monthly Deposit | Tenure | Interest Rate |
|---|---|---|---|
| RD 1 | ₹3,000 | 1 year | 7.50% |
| RD 2 | ₹3,000 | 2 years | 8.00% |
| RD 3 | ₹3,000 | 3 years | 8.25% |
This strategy balances liquidity and returns while taking advantage of future interest rate hikes.
❓ Frequently Asked Questions (FAQs)
1. Can I withdraw an RD early?
Yes, but banks may charge a penalty or reduce the applicable interest rate.
2. Are RD returns taxable?
Yes, RD interest is taxable under “Income from Other Sources.” TDS applies if interest exceeds ₹40,000 (₹50,000 for senior citizens) per year.
3. Which bank gives highest RD interest in 2025?
As of June 2025, Jana Small Finance Bank offers one of the highest RD rates at 8.35% for regular customers and 8.85% for seniors.
4. Is it safe to invest in Small Finance Bank RDs?
Yes. All deposits up to ₹5 lakh are insured under DICGC, even for SFBs.
5. Can I open an RD online?
Yes, most banks allow opening and managing RDs through mobile apps or net banking.
✅ Final Tips Before You Open an RD
- Start small but stay consistent
- Opt for auto-debit to avoid missed payments
- Compare across banks before locking in
- Reinvest on maturity to benefit from compounding
📌 Conclusion
High-interest recurring deposit schemes offer a safe and reliable way to save regularly and earn attractive returns in 2025. With interest rates now reaching up to 8.5%, they are a great option for low-risk investors, especially when chosen wisely from reputable banks or NBFCs.
Whether you’re saving for a vacation, wedding, or emergency fund, an RD can be the perfect tool for disciplined and stable financial growth.