Small finance banks offer up to 7.5% interest rate on recurring deposit


Recurring deposits with small finance banks can be attractive considering the interest rates and their terms and conditions.

Most small finance banks offer a recurring deposit (RD) of a minimum of six months and a maximum of 10 years. The depositor can start with as low as 100. However, a majority also want the depositor to first have a savings account with the bank before opening an RD.

A recurring deposit is like a fixed deposit (FD). The difference is that an individual can keep depositing money in the RD account every month. Think of it as a systematic investment plan or SIP for FDs.


The interest rates depend on the tenure of the RD – there could be a higher interest rate for a three-year product than a one-year RD.

Besides banks, even India Post offers RD under its Small Savings Schemes. The highest RD interest rate from India Post, State Bank of India, ICICI Bank, and HDFC Bank is 5.4% to 5.8%.

Small finance banks offer the highest interest rate between 6.25% and 7.5%. According to its website, AU Small Finance Bank offers 6.25% interest on RD of 25 to 36 months and 61 to 120 months.


North East Small Finance Bank 7.5% rates on its two-year FD, according to its website. Utkarsh Small Finance Bank offer 7% on RD of 24 to 36 months.

Most other small finance banks have the highest RD at 6.5% to 6.75%. These include Fincare Small Finance Bank, Equitas Small Finance Bank, ESAF Small Finance Bank, Shivalik Small Finance Bank, Suryoday Small Finance Bank, Ujjivan Small Finance Bank and Jana Small Finance Bank.

The majority of small finance banks offer their highest interest for RD of less than five years. Equitas Small Finance Bank is an exception that offers its highest rate (6.5%) for RDs of 90 months and above.


(Do you have personal finance queries? Send them to [email protected] and get them answered by industry experts)

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