One of the popular investment options to save money is Recurring deposit (RD). Federal Bank RD is designed for saving money monthly with a stipulated timeline and earning extra interest on your investment. This can help individuals achieve future goals such as children’s education or marriage. Depositors have the flexibility to choose the period and the installment amount. The bank also offers a standing instruction facility and the option to avail of a loan against the recurring deposit account.
The Federal Bank RD Interest Rates vary from 5.75% to 7.40% per annum, with senior citizens receiving an additional interest rate of 0.50%.
Federal Bank RD Interest Rates 2024
You can now align your financial goals and objectives with the investment and reinvestment timelines, to help maximize return on your investment. The table below shows the Interest rates for Resident Term Deposits for less than ₹2 crores effective from 17-04-2024 (Rates in % p.a)
| Deposit Tenure | Interest Rates for General Public (% p.a.) | Interest Rates for Senior Citizens (% p.a.) |
|---|---|---|
| 181 days to 270 days | 5.75% | 6.25% |
| 271 days to less than 1 year | 6.00% | 6.50% |
| 1 year to less than 13 months | 6.80% | 7.30% |
| 13 months to 399 days | 7.20% | 7.70% |
| 400 days | 7.40% | 7.90% |
| 401 days to 21 months | 7.20% | 7.70% |
| Above 21 months to less than 3 years | 7.05% | 7.55% |
| 3 years to less than 5 years | 7.00% | 7.50% |
| 5 years and above | 6.60% | 7.25% |
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Federal Bank RD Interest Rates For NRE
The table below shows the Interest rates for NRE Term Deposits for less than ₹2 crores effective from 17-04-2024 (Rates in % p.a)
| Deposit Tenure | Interest Rate (% p.a.) |
|---|---|
| 1 year to less than 13 months | 6.80% |
| 13 months to 399 days | 7.20% |
| 400 days | 7.40% |
| 401 days to 21 months | 7.20% |
| Above 21 months to less than 3 years | 7.05% |
| 3 years to less than 5 years | 7.00% |
| 5 years and above | 6.60% |
Federal Bank RD Calculator
An online RD calculator is useful for estimating the growth of your savings over time when contributing a fixed amount at regular intervals.
Here are the steps to use the RD (Recurring Deposit) calculator:
- Step 1: Enter the deposit amount.
- Step 2: Input the RD interest rate.
- Step 3: Select the investment tenure.
- Step 4: The invested amount, total interest, and maturity amount will be displayed.
Note: The interest rates and other details may change over time, so it’s always recommended to cross-check with the bank’s latest information before making any financial decisions.
Features of Federal Bank RD Interest Rate
Federal Bank’s Recurring Deposit (RD) account is a great way to grow your savings gradually. With a minimum deposit of just ₹50 and the flexibility to invest regularly helps you achieve your financial goals. This table summarizes the key features of the Federal Bank RD account, including interest rates, deposit terms, and benefits for senior citizens.
| Feature | Description |
|---|---|
| Minimum Deposit | ₹50/- |
| Additional Contributions | Multiples of ₹10/- |
| Interest Calculation | Quarterly compounding |
| Interest Withdrawal | Not allowed before maturity |
| Deposit Period | Min 6 months, Max 10 years |
| Account Tracking | Internet banking |
| TDS | Applicable on interest |
| TDS Exemption | Form 15G/15H |
| Senior Citizen Bonus | 0.50% additional interest (deposits < ₹1 crore) |
| Minimum Tenure | 7 days |
RD Interest Rates of Top Banks
Here is a comprehensive list of RD interest rates from top banks:
| Bank Recurring Deposit | RD Interest Rates (p.a) General Public | RD Interest Rates (p.a) Senior Citizens |
|---|---|---|
| Federal Bank RD | 5.75% to 7.50% | 6.25% to 8.00% |
| State Bank of India RD | 6.50% to 7.00% | 7.25% to 7.50% |
| ICICI Bank RD | 4.75% to 7.20% | 5.25% to 7.75% |
| HDFC Bank RD | 4.50% to 7.25% | 5.00% to 7.75% |
| Axis Bank RD | 5.75% to 7.20% | 6.25% to 7.85% |
| Bank of Baroda RD | 5.75% to 7.25% | 6.25% to 7.75% |
| Punjab National Bank RD | 6.00% to 7.25% | 6.50% to 7.75% |
| IDBI Bank RD | 6.25% to 7.00% | 6.75% to 7.50% |
| Canara Bank RD | 6.15% to 7.25% | 6.65% to 7.75% |
| Indian Bank RD | 4.50% to 7.25% | 5.00% to 7.75% |
| Indian Overseas Bank RD | 5.75% to 7.30% | 6.25% to 7.80% |
| Union Bank of India RD | 5.75% to 6.50% | 6.25% to 7.00% |
| Yes Bank RD | 6.10% to 7.75% | 6.60% to 8.25% |
| Bandhan Bank RD | 4.50% to 7.85% | 5.25% to 8.35% |
| Bank of India RD | 4.50% to 6.00% | 5.00% to 6.50% |
| Bank of Maharashtra RD | 5.50% to 6.25% | 6.00% to 6.75% |
| City Union Bank RD | 6.25% to 7.00% | 6.50% to 7.50% |
| DBS Bank RD | 6.00% to 7.50% | 6.50% to 8.00% |
| Dhanalakshmi Bank RD | 6.50% to 7.25% | 6.50% to 7.75% |
| IndusInd Bank RD | 7.00% to 7.75% | 7.50% to 8.25% |
| Jammu and Kashmir Bank RD | 5.75% to 7.10% | 6.25% to 7.60% |
| Karnataka Bank RD Interest Rates | 5.80% to 7.40% | 6.20% to 7.90% |
| Karur Vysya Bank RD Interest Rates | 6.25% to 7.50% | 6.25% to 8.00% |
| Saraswat Bank RD Interest Rates | 7.00% to 7.50% | 7.50% to 8.00% |
| South Indian Bank RD Interest Rates | 5.00% to 7.40% | 5.50% to 7.90% |
| TMB RD Interest Rates | 6.75% to 7.75% | 7.00% to 8.25% |
| Post Office RD Rate | 6.50% | 6.50% |
Note: The interest rates are subject to change. Do visit the official website for updated rates.
Besides banks, you can also invest in Post Office RD and calculate the return with a post office RD calculator.
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Federal Bank RD Interest Calculation
You can use an online RD calculator to calculate the interest amount for your Recurring Deposit (RD) or compute it manually. The mathematical formula for this calculation is provided below.
M = R[(1+i)^n-1]/(1-(1+i)^(-1/3) )
Here,
M = Maturity Value
R = Monthly Installment
n = Number of quarters
I = Rate of interest
Example:
Let’s assume a monthly recurring deposit of ₹500 for 5 years at 7.4% interest p.a. compounded quarterly.
Here’s the calculation for the interest you will earn at maturity:
Given:
- Monthly deposit (R) = ₹500
- Deposit period (n) = 5 years * 4 quarters/year = 20 quarters
- Interest rate (i) = 7.4% p.a. = 7.4 / 100 = 0.074 (converted to decimal)
Using the compound interest formula:
M = R [(1 + i)^n – 1] / (1 – (1 + i)^(-1/3))
Calculating the maturity value (M):
M = 500 * [(1 + 0.074)^20 – 1] / (1 – (1 + 0.074)^(-1/3)) M ≈ ₹13,635.76
Total deposit:
Total deposit = Monthly deposit * Number of deposits Total deposit = ₹500/month * 20 quarters = ₹10,000
Interest earned:
Interest = Maturity value – Total deposit Interest = ₹13,635.76 – ₹10,000 Interest ≈ ₹3,635.76
Therefore, with a 7.4% interest rate compounded quarterly, you would earn approximately ₹3,635.76 in interest over the 5 years on a recurring deposit of ₹500.
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Types of Federal Bank RD Schemes
Federal Bank offers a range of Recurring Deposit (RD) schemes to meet various financial needs. The following Suite of Federal Bank RD Schemes should help you assess your choice with interest rate and lock-in period features and choose the one that best fits your savings goals in real time.
Here are the different types of Federal Bank RD Schemes:
1. Short-Term Recurring Deposits:
- Tenure: 181 days to less than one year
- Interest Rates: General Public: 4.00% p.a. to 4.40% p.a. For Senior Citizens: 4.50% p.a. to 4.90% p.a.
2. Medium-Term Recurring Deposits:
- Tenure: 12 to 36 months
- Interest Rates: General Public: 5.10% p.a. to 5.35% p.a. For Senior Citizens (over 60 years): 5.60% p.a. to 5.85% p.a.
3. Long-Term Recurring Deposits:
- Tenure: More than 24 months
- Interest Rates: General Public: 5.35% p.a. For Senior Citizens: 5.85% p.a. to 6.00% p.a.
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Steps to Open Federal Bank RD Account Using FedMobile App
You can either go to a Federal Bank branch or utilize their digital platforms such as the FedMobile app to open a Recurring Deposit account.
Here are the steps to open Federal bank accounts using the FedMobile app online.
Step 1: Log in to the FedMobile app and tap on ‘Investments’ at the bottom of the Home screen
Step 2: Go to ‘Bank Deposits’ and select ‘Recurring Deposit’ and proceed
Step 3: Enter the deposit amount and select a scheme and period
Step 4: Choose the date to debit the amount and select the Debit Account
Step 5: Confirm the details and enter your MPIN to confirm the deposit
Note: Additionally, you can also open a Recurring Deposit account through FEDDY, the bank’s virtual assistant, which is accessible on Alexa, Google Assistant, the official website, and WhatsApp.
Eligibility Criteria to Open Federal Bank RD Account
Federal Bank has established certain criteria for individuals and entities eligible to open a recurring deposit account. They include:
- Single individuals
- Individuals in joint ownership with others
- Minors with a guardian
- Hindu Undivided Families (HUF)
- Sole proprietorships
- Clubs/Associations
- Partnerships
- Corporations
- Any other entity permitted by RBI
Documents Required For Federal Bank RD Account
To open a recurring deposit account, the following documents must be submitted:
- A completed application form
- Proof of address
- PAN card
- Identification proof
- Photographs
- KYC documents
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Benefits of Federal Bank RD Account
Investing in Recurring Deposits (RDs) can be a valuable addition to one’s financial portfolio. Federal Bank RD offers several advantages that make it an attractive investment option. Here are the benefits:
- Assured Returns: One of the main advantages of investing in Recurring Deposits is that they provide guaranteed returns. Unlike other investment options, RDs offer fixed interest rates, ensuring a predictable return at the end of the term.
- Flexible Investment Periods: Federal Bank provides flexible tenure options, ranging from as short as 6 months to as long as 10 years. This allows individuals to select a tenure that aligns with their financial objectives and requirements.
- No Exposure to Market Risks: While investing in the stock market or mutual funds carries market-related risks, Recurring Deposits are not affected by market conditions. Investors will receive a fixed return regardless of market fluctuations.
- Consistent Savings: Recurring Deposits promote the practice of regular savings. By investing a set amount at regular intervals, individuals can accumulate savings over time and achieve their financial targets.
Federal Bank RD Premature Withdrawal
Federal Bank allows its RD customers to withdraw their deposits prematurely, though certain conditions and charges may apply.
Table showing revised penalty for premature withdrawal:
| Period of Deposit* | Penal Interest for deposit of less than ₹2Crores |
|---|---|
| Up to and including 15 days | 0% |
| Above 15 days | 1% |
*Period for which the deposit is maintained with the Bank, irrespective of the contracted tenor
Table showing penalty for premature withdrawal penalty for smart deposit scheme:
| Period of Deposit | Penal Interest |
|---|---|
| Up to and including 90 days | 0% |
| Above 90 days | 1% |
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