State Bank of India Recurring Deposit Interest Rates 2025

Dec 16, 2025
Admin

Recurring Deposits (RDs) are a preferred saving option among risk-averse investors who want fixed returns with disciplined monthly investments. Among all banks offering this facility, the State Bank of India (SBI) stands out due to its vast reach, trust, and competitive interest rates. Whether you’re a salaried individual, a student, a homemaker, or a senior citizen, the SBI RD scheme offers flexibility, security, and convenience for all.

In this in-depth blog post, we’ll explore everything you need to know about State Bank of India Recurring Deposit in 2025—from features, benefits, eligibility, interest rates, and account opening process to maturity calculations, tax implications, and FAQs.

What is a Recurring Deposit (RD)?

A Recurring Deposit (RD) is a financial instrument offered by banks and post offices that allows individuals to deposit a fixed amount every month for a predetermined tenure and earn interest on it. It’s ideal for those who wish to build a lump sum over time without investing a large amount at once.

Unlike a fixed deposit where you invest a lump sum, an RD helps inculcate a habit of saving monthly. At the end of the term, you receive the invested amount along with interest accrued.

Introduction to SBI Recurring Deposit

The State Bank of India Recurring Deposit scheme is designed for individuals who want to save systematically and earn stable interest over time. SBI is India's largest bank, and its RD accounts are among the most trusted products in the country.

SBI RDs are available to individuals, minors, senior citizens, and NRIs with varying tenure and interest rate options, offering a solid return with minimal risk.

Key Features of SBI RD in 2025

Minimum Deposit
Start an RD account with as low as ₹100 per month, and thereafter in multiples of ₹10. This makes it accessible for everyone.
Tenure Options
You can open an RD for a minimum of 12 months (1 year) and a maximum of 120 months (10 years).
Interest Rates
SBI offers attractive RD interest rates comparable to fixed deposits. The rates may vary depending on tenure and customer category (senior citizens get a higher rate).
Nomination Facility
Nomination is allowed for RD accounts, ensuring financial protection for your family in case of any unforeseen event.
Premature Withdrawal
Allowed with a penalty, but interest will be lower than the contracted rate.
Loan Against RD
You can avail loans up to 90% of the RD amount in case of emergencies, keeping your savings intact.
TDS Applicability
Tax Deducted at Source (TDS) is applicable if the interest income exceeds ₹40,000 (₹50,000 for senior citizens) in a financial year.
Online and Offline Access
Open and manage your RD online through YONO SBI or SBI Net Banking, or visit the nearest branch.

SBI RD Interest Rates in 2025

As of mid-2025, the interest rates on SBI recurring deposits are in the range of 6.40% to 7.10% for regular customers and up to 7.60% for senior citizens. These rates are subject to change based on RBI policy changes and market conditions.

Interest is compounded quarterly, which helps your savings grow steadily over the chosen tenure.

How to Open an SBI RD Account

You can open an SBI RD account through two main channels:

1. Online through YONO or Net Banking

Log in to your SBI Net Banking account or YONO SBI app
Navigate to the “Deposit” section and click on “Recurring Deposit”
Choose the deposit amount, tenure, and frequency
Confirm details and authenticate using OTP or password
The account will be created instantly

2. Offline at SBI Branch

Visit the nearest SBI branch
Fill out the RD account opening form
Submit KYC documents (Aadhaar, PAN, Photo, etc.)
Deposit the first installment
The RD passbook will be issued for record-keeping

Benefits of SBI RD for Different Users

For Salaried Individuals

Automate savings every month directly from your salary account
Earn higher interest than savings accounts
Use RD for planned future expenses like vacation or down payment

For Students and Young Adults

Build a disciplined saving habit early
Start with a small amount like ₹100 per month
Use RD returns for exam fees, gadgets, or career investments

For Senior Citizens

Enjoy extra 0.50% interest on SBI RDs
Use the RD maturity amount for health expenses or family gifting
Can also be used to invest pension amounts

For Homemakers

Encourage financial independence through savings
Can plan ahead for children’s gifts or household emergencies

For NRIs

NRE and NRO RD accounts available
Earn steady returns in INR without market risk
Manage the account online from abroad

SBI RD vs Fixed Deposit (FD)

While both RDs and FDs offer fixed interest, the choice depends on your financial goals.

FD is ideal if you have a lump sum ready.
RD suits you if you want to save monthly and build a fund.

Both are safe, bank-backed instruments. SBI RD is perfect for budget-conscious savers, while FD caters to bulk investors.

SBI RD Maturity Calculation

To calculate the maturity value of an RD, the formula used is:

Maturity Amount = P × (n(n+1)/2) × (r/400)

Where:

P = monthly installment
n = number of months
r = annual interest rate

However, you don’t need to calculate this manually. Use SBI’s RD calculator available online. Just enter the amount, tenure, and interest rate to find out how much you’ll receive on maturity.

Tax Implications on SBI RD

Here are some points to note about tax on SBI RDs:

Interest is fully taxable as per your income tax slab.
If interest exceeds ₹40,000 (₹50,000 for senior citizens), SBI deducts TDS @ 10%.
You can submit Form 15G/15H if your total income is below the taxable limit to avoid TDS.
It’s advisable to declare RD interest while filing income tax returns to stay compliant.

Things to Remember Before Opening SBI RD

Choose a realistic monthly amount to avoid missed payments
Check the interest rate applicable to your chosen tenure
Opt for auto-debit to avoid penalties
Submit nomination details during account opening
Plan the RD maturity around your future financial needs
Evaluate whether the goal is short-term (e.g., vacation) or long-term (e.g., wedding)

SBI RD for Goal-Based Savings

Recurring deposits are particularly helpful for goal-based savings. You can align your RDs with financial milestones like:

Children’s education
Vacation planning
Emergency fund building
Marriage expenses
Gadget or car purchase
Festival shopping

Open multiple RDs for different goals. For example, a 1-year RD for a vacation and a 5-year RD for a down payment on a car.

SBI RD and Financial Discipline

Recurring deposits help in cultivating a habit of regular saving. Since the amount gets auto-debited each month, it’s like a self-imposed financial discipline.

Moreover, the fixed nature of RDs eliminates impulsive withdrawals and ensures your fund grows uninterrupted.

For first-time savers, SBI RD is a great stepping-stone to financial planning.

Digital Features of SBI RD in 2025

SBI has continued to enhance its digital banking experience. When you open an RD through online banking:

You can modify the tenure or monthly amount easily
You receive timely SMS and email alerts
Interest gets auto-credited
The RD is visible in your account summary
You can break the RD prematurely through the app if needed

These features make it super convenient to manage your investment without visiting a bank.

Who Should Consider SBI RD?

SBI RD is ideal for:

Individuals with a fixed monthly income
Parents saving for their child’s future
Retirees wanting safe returns
Students building a savings culture
Anyone who wants low-risk investment options

If you don’t want to deal with market volatility, SBI RD is a stable choice.

Frequently Asked Questions (FAQs)

Q1. What is the minimum and maximum amount for SBI RD?

The minimum deposit is ₹100/month. There’s no maximum limit, but it must be in multiples of ₹10.

Q2. What is the tenure range for SBI Recurring Deposit?

You can choose a tenure from 12 months to 120 months (1 to 10 years).

Q3. Can I open multiple RDs in SBI?

Yes, you can open multiple RDs for different financial goals.

Q4. What happens if I miss a payment?

A small penalty will be charged. Repeated defaults may lead to closure or reduced interest.

Q5. Can I withdraw the RD before maturity?

Yes, premature closure is allowed with interest penalty.

Q6. Is TDS applicable on SBI RD?

Yes, TDS applies if annual interest exceeds ₹40,000 (₹50,000 for senior citizens).

Q7. Is there any benefit for senior citizens in SBI RD?

Yes, senior citizens get an extra 0.50% interest on their RD.

Q8. Can I open SBI RD online?

Absolutely. Use SBI Net Banking or the YONO app for quick account opening.

Q9. Is the interest earned on RD taxable?

Yes, it is added to your total income and taxed as per your slab rate.

Q10. Can NRIs open an SBI RD?

Yes, NRIs can open NRE/NRO RD accounts with SBI, subject to FEMA regulations.

Final Thoughts

The State Bank of India Recurring Deposit is a smart and safe way to save regularly and grow your money steadily. It’s ideal for investors seeking guaranteed returns without market risks. With flexible tenure, affordable monthly contributions, and attractive interest rates—SBI RD continues to be a reliable savings tool in 2025.

Whether you’re planning for a goal or just want to inculcate a habit of saving, SBI RD is worth considering. It blends the trust of SBI with the power of compounding, giving your money the boost it deserves.