Now you will get more interest on Post Office Recurring Deposit (RD). The government has increased its base rate from 5.8% to 6.2% with effect from April 1. Earlier in February, the country’s largest bank SBI had also increased the interest allowance of RD. This time maximum interest of 7% is being given on RD. We are telling you about SBI and Post Office RD. So that you can invest in the right place.
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First understand what is Recurring Deposit ?
Recurring Deposit, or RD, can help you to save decent amount with consistent habit of saving. You can use it like a emergency fund. That means you keep putting a fixed amount in it every month when you get a salary, and you will have a huge amount in your hand when it matures.
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Special things related to SBI RD
- You can invest in SBI from 1 year to 10 years.
- Maximum 7% maximum interest is being received on SBI RD.
- Senior citizens get 0.50% more interest on this.
- You can invest a minimum of Rs 100 every month in this.
- Beyond this, you can deposit any amount in multiples of 10.
- There is no limit on the maximum deposit amount. Click here for more information
![recurring deposit](http://bankpediaa.com/wp-content/uploads/2023/04/recurring-deposit-sbi-jpg.webp)
Special things related to post office RD
- India Post’s RD is getting 6.2% interest.
- You can invest a minimum of Rs 100 every month in this.
- Beyond this, you can deposit any amount in multiples of 10.
- There is no limit on the maximum deposit amount. Click here for more details
How much return on investing where?
If you invest a thousand rupees every month for 5 years in post office Recurring Deposit, then after 5 years you will get around 70 thousand 431 rupees. On the other hand, if you invest a thousand rupees every month for five years in SBI’s RD, you will get 70 thousand 989 rupees. Here we are telling you how much money you can generate by investing 1,000 to 2,000 rupees every month for five years.
Tax on interest from Recurring Deposit
If the interest income from a recurring deposit (RD) is up to Rs 40 thousand (Rs 50 thousand in the case of senior citizens), then you do not have to pay any tax on it. 10% TDS is deducted if the income is more than this.
Submit Forms 15H and 15G if your income is not taxable.
If your annual interest income from RD is more than 40 thousand rupees (50 thousand rupees in the case of a senior citizen), but your total annual income (including interest income) is not up to the limit where it is taxed, then the bank does not deduct TDS.
For this, senior citizens have to submit Form 15H, and others have to submit Form 15G to the bank. Form 15G or 15H is a self-declaration form. In this, you say that your income is outside the tax limit. Anyone who fills out this form will be kept out of the tax net.