Recurring Deposit (RD) interest rates vary more between banks than most savers expect — and the Post Office RD, unlike bank RDs, hasn’t moved in over two years. Here’s exactly where rates stand today, how they got here, and what that gap means for where you should park your monthly savings.
Current RD Interest Rates 2026 (SBI, HDFC, ICICI, Post Office)
RD rates typically track each bank’s own funding needs rather than a single published benchmark, so the same tenure can pay meaningfully different interest depending on where you open the account. As of September 2026:
| Bank / Post Office | General Rate Range | Senior Citizen Rate | Notes |
|---|---|---|---|
| State Bank of India (SBI) | 6.25% – 6.40% | Up to 6.90% (2-year tenure) | Largest bank, most-quoted RD benchmark |
| HDFC Bank | 5.50% – 7.00% | Up to 7.75% (select tenures) | Widest rate band across tenures |
| ICICI Bank | 4.50% – 6.50% | Up to 7.10% (3–5 year tenure) | Lower short-tenure rates, competitive on longer terms |
| Post Office RD | 6.70% (flat, single 5-year tenure) | No separate senior citizen rate | Government-backed, rate fixed quarterly by the Finance Ministry |
Rates are indicative as of September 2026 and vary by tenure within each bank’s published slab. Run your own numbers — principal, tenure, and rate — on the RD Calculator to see the exact maturity value.
RD Interest Rate History: The Post Office Benchmark (2019–2026)
Bank RD rates change whenever each bank’s Asset-Liability Committee decides to move them, which makes a clean multi-year history hard to track. The Post Office RD rate is different: it’s reviewed and published every quarter by the Ministry of Finance alongside PPF, NSC, and the other small savings schemes, which makes it the most reliable long-run benchmark for how deposit rates in India have actually moved.
| Period | Post Office RD Rate | Context |
|---|---|---|
| FY 2018-19 – Q4 FY 2019-20 | 7.20% – 7.30% | Pre-COVID levels, gradually easing |
| Q1 FY 2020-21 (Apr 2020) | 5.80% | Sharp 140-bps cut in a single quarter as RBI slashed rates for COVID-19 relief |
| 2021 – 2022 (all quarters) | 5.80% | Held flat for two full years through the low-rate era |
| Q1 2023 – Q4 2023 | 5.80% → 6.20% → 6.50% → 6.70% | Gradual quarterly recovery as the post-COVID hiking cycle fed through |
| 2024 – 2026 (9+ consecutive quarters) | 6.70% (unchanged) | Held flat even as the RBI repo rate has been cut since late 2024 |
That last row is the notable part: the RBI has been in an active rate-cutting cycle since December 2024, and bank RD rates have started drifting down with it (see the general-rate ranges above). The Post Office RD rate, revised quarterly by the Finance Ministry rather than set independently by each bank, hasn’t moved from 6.70% since early 2024. For senior citizens especially — who get no separate bump on the Post Office RD — that flat rate is now more competitive against banks than it was two years ago. See our broader FD Interest Rate History for how the same repo-rate cycle has played out on fixed deposits.
How RD Interest Is Calculated
Both bank and Post Office RDs use quarterly compounding, applied per instalment rather than on the full deposit at once — each monthly instalment earns interest only for the time it remains invested until maturity. The formula for a single instalment is:
A = P (1 + r/4)4t
where P is the monthly instalment, r is the annual interest rate, and t is the time in years that instalment remains invested. The maturity value is the sum of this calculation across every instalment, since each one has a different remaining tenure. Working this out by hand for a 5-year RD means 60 separate calculations — use the RD Calculator to get the exact maturity amount and total interest instantly for any principal, rate, and tenure.
RD vs FD: Which Should You Choose?
Both instruments pay comparable rates for a comparable tenure and issuer. The real difference is cash-flow discipline, not returns. Choose an RD if you’re investing from monthly income and want to build the savings habit without needing a lump sum upfront. Choose an FD if you already have a lump sum sitting idle and want to lock in today’s rate for the full amount immediately. If you’re deciding between an RD and a SIP into a mutual fund instead of a bank product entirely, see our detailed Recurring Deposit vs SIP comparison.
Where RD Rates Are Officially Announced
Each bank publishes its own RD rates independently on its website and revises them at its own discretion — there’s no single central notification, similar to fixed deposits. The Post Office RD rate is the exception: it’s set every quarter by the Department of Economic Affairs, Ministry of Finance, alongside PPF, NSC, SCSS, and the other small savings instruments, and published via official government notification ahead of each quarter.
Related Guides & Tools
- RD Calculator — Compute your exact maturity amount and interest
- Recurring Deposit vs SIP Comparison
- FD Interest Rate History (2019–2026)
- Best FD Rates India 2026
- FD Calculator
- Compound Interest Calculator — Model lumpsum + monthly SIP together
Frequently Asked Questions
What is the current RD interest rate for 2026?
Bank RD rates for 2026 range roughly from 4.50% to 7.75% depending on the bank, tenure, and whether you’re a senior citizen. SBI’s general range is 6.25%–6.40%, HDFC Bank spans 5.50%–7.00%, ICICI Bank ranges 4.50%–6.50%, and the Post Office RD is a flat 6.70% for its single 5-year tenure.
Why has the Post Office RD rate stayed at 6.70% for so long?
The Post Office RD rate is reviewed quarterly by the Ministry of Finance based on government bond yields and broader small-savings policy, not directly tied to the RBI repo rate the way bank rates are. It rose steadily through 2023 to reach 6.70% and has been held there for over nine consecutive quarters, even as the RBI has been cutting the repo rate since late 2024.
Is RD interest taxable?
Yes. RD interest is fully taxable as per your income tax slab, same as FD interest. Banks deduct TDS at 10% if your total interest income across all RDs and FDs with that bank exceeds Rs. 40,000 in a financial year (Rs. 50,000 for senior citizens). Submit Form 15G/15H if your total income is below the taxable threshold to avoid TDS deduction.
Which bank offers the highest RD interest rate right now?
Among the banks compared here, HDFC Bank’s senior citizen rate of up to 7.75% on select tenures is the highest quoted rate. For general (non-senior) customers, rates cluster more tightly in the 6.25%–7.00% range across SBI, HDFC, and ICICI’s longer tenures. Always confirm the exact tenure-wise rate on the bank’s official site before opening an account, since these ranges span multiple tenure slabs.
Can I change my RD instalment amount after opening the account?
No. The monthly instalment amount is fixed when you open an RD account and cannot be changed midway. If your savings capacity increases, you’ll need to open a new RD account for the additional amount rather than modifying the existing one.
Disclaimer: Interest rates are indicative and subject to change without notice. Please verify current rates with the respective bank or post office before investing. RD returns are subject to TDS and income tax as per applicable laws.
Reviewed by: MoneyPundit Team | Last updated: September 9, 2026
Data sources: Bank RD rates referenced from official bank rate pages and BankBazaar’s RD rate comparison. Post Office RD rate history compiled from Ministry of Finance quarterly small savings scheme notifications, cross-referenced via RBI Financial Education resources.
Methodology: Bank rate ranges reflect the lowest and highest published rate across all standard tenures as of September 2026. Post Office RD history reflects the officially notified quarterly rate on the standard 5-year recurring deposit account.
