INCOME TAX20 Sept 2026
RD interest rates: How much can you actually earn? Check what post offices and major banks offer
Banks and post offices have listed their recurring deposit rates, and senior citizens can earn up to 8.50% a year, with Yes Bank highest. But an RD works differently from a fixed deposit: each monthly deposit earns interest only while it stays invested. So ₹5,000 a month for a year at 8.50% earns roughly ₹2,763, not 8.50% on ₹60,000. Compare rates by tenure before you commit.
Key Statutory Highlights
- Yes Bank lists the highest senior citizen recurring deposit rate at 8.50%, followed by Bandhan Bank at 8.35% and IndusInd Bank at 8.25%.
- Each monthly RD instalment earns interest only for the time it remains deposited, so the full amount does not earn for the whole year.
- Depositing ₹5,000 monthly for 12 months at 8.50% gives about ₹2,763 interest, taking total savings to roughly ₹62,763.
Actionable Advice for Taxpayers / Founders:Check the listed rate for the exact tenure you want, because some banks pay less for longer periods — Karnataka Bank, for example, drops from 6.50% at five years to 5.80% beyond five years. Confirm current rates with your bank before booking.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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