In the budget presented on February 1 , Finance Minister Nirmala Sitharaman announced major changes in the tax deduction at source (TDS) rules. The new TDS rule will come into effect from April 1. After the new rules come into force, investors making fixed deposits (FD) and recurring deposits (RD) will get a big relief.

In fact, giving relief to senior citizens, the limit of TDS deduction on income from FD has been doubled. Relief has also been given to common citizens. From April 1, TDS deduction on interest income from fixed deposits (FD), recurring deposits (RD), etc. for senior citizens will be done only when the interest income exceeds Rs 1 lakh in a financial year. This means that if the interest income of a senior citizen is less than Rs 1 lakh, then he will not have to pay TDS.

Relief to common people too

For non-senior citizens (common citizens), the government has increased the TDS limit for interest income from Rs 40,000 to Rs 50,000 effective from April 2025. The move is aimed at reducing the tax burden on depositors, especially those who depend on FD interest as a primary source of income. As per the revised rules, the bank will deduct TDS if the total annual interest amount exceeds Rs 50,000. However, if a common citizen keeps his interest income within the limit of Rs 50,000, the bank will not deduct any TDS.

TDS on lotteries

The government has simplified TDS rules related to winnings from lotteries, crosswords and horse racing. Earlier, TDS was deducted when the total winnings in a year exceeded Rs 10,000. Now TDS will be deducted only when a single transaction exceeds Rs 10,000. Budget 2025 has also increased the TDS limit for various commissions, providing relief to insurance agents and brokers.

The TDS limit for insurance commission has been increased from Rs 15,000 to Rs 20,000, effective from April 1, 2025. For those investing in mutual funds (MFs) or stocks, the exemption limit on dividends and income earned from MF units or specific companies has been increased from Rs 5,000 to Rs 10,000.

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The post New TDS rule will be implemented from April 1, those investing in FD-RD will get big benefit first appeared on Rightsofemployees.com.

On which interest is also received. It can also be called the “piggy bank” of the bank. The only difference is that interest is earned in Recurring Deposit (RD). Dhanteras and Diwali are considered auspicious days for investment. If you are planning to invest then Recurring Deposit i.e. RD can be a better option for you. Let us know which bank is currently giving higher returns on RD-

State Bank of India

SBI offers recurring deposits of 12 months and 10 years. RD can be availed on deposits starting from Rs. Ordinary citizens have to pay 6.50% to 7% interest every year on deposits of less than Rs 2 crore. Senior citizens get 0.50% or 0.80% more interest.

Axis Bank

Axis Bank also has attractive interest offers on RD. Ordinary citizens are getting 7.26% interest on minimum deposit of Rs 0. Ordinary citizens are getting maximum interest of 8.01%.

Kotak Mahindra Bank

Like Axis Bank, Kotak Mahindra Bank is also giving maximum interest of 7.26% to general citizens and 0.81% to senior citizens.

ICICI Bank

ICICI Bank is also offering attractive interest on recurring deposits. Ordinary citizens are getting maximum interest of 7.10% per annum on minimum deposit of Rs 0. The interest rate for senior citizens is 7.60%.

HDFC bank

India’s largest private sector bank is also offering excellent interest on recurring deposits. The interest rate for ordinary citizens is maximum 7.1%. Whereas senior citizens are getting maximum interest of 7.75%. The bank also offers a lock-in-period of 1 month to the customers.

(Disclaimer: The purpose of this article is only to share general information. Rightsofemployees.com does not recommend investing in any scheme or plan.)

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In the October-December quarter, the Post Office has increased the interest rate on RD to 6.7 percent. You can get information about where it would be better for you to invest your money in the bank or post office and which of these places can provide better interest and facilities.

What is recurring deposit?

RD is a kind of systematic saving plan, where you save every month and keep depositing your money for a few years. You get this money collected along with interest after the completion of the stipulated period of RD. Therefore this scheme is very much liked in middle class families.

How are RDs of bank and post office different?

The biggest difference between RD of bank and post office is the time period. While banks offer you to choose the tenure from 6 months to five years, the post office has RD only for five years.

What is the difference in interest rates?

If we look at the interest rates on RD, only a few private banks are ahead of the post office. Most banks give less interest on RD than post offices. Only HDFC Bank, ICICI Bank, Axis Bank, Canara Bank and Bank of Baroda (BOB) are offering higher interest. Their interest rates range from 6.75 percent to 7 percent.

Who can open RD account

To open an RD account, you must be a citizen of India. Even if your age is less than 10 years, this account can be opened with your guardian. RD can also be opened as a joint account.

With how much money can you start investing?

You can open this account in the post office with a minimum of Rs 100 per month. Maximum you can put any amount of money. Since RD account is backed by the Government of India, there is no risk in this scheme.

Banks have different schemes

However, the RD scheme of the bank is different from that of the post office. In this also you can start with Rs 100 per month. But, the thing to note is that your total deposit and interest on it should not exceed Rs 5 lakh. Only amounts up to Rs 5 lakh are covered under the deposit insurance program.

How to withdraw money before time is up

You can close RD account in post office only after completion of three years. However, in such a situation, you will get only the interest on the savings account. Apart from this, you can also take loan on RD account, on which the amount can be repaid in installments by paying 2% more interest. Since there is no lock-in period in most banks, it is quite easy to withdraw money before time. However, you may have to pay a fine.

Income tax on RD

You do not get tax benefits on RD account. Apart from this, the interest received on maturity is considered as income, hence you will have to pay TDS.

Where is it better to invest money, bank or post office?

Your RD account is safe both in bank and post office. However, compared to banks, the post office gives you more guarantee that your money is safe. But if we look at the simple rules for closing the account, the banks win. Therefore, you can take a decision keeping your needs in mind.

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It works like a Systematic Investment Plan (SIP) of a mutual fund. That is, you have to invest a fixed amount every month in it. On this, you get a pre-fixed interest. However, for this it is important that you have the required amount of money to invest every month.

This investment is suitable for those who do not have the money to invest together but they have regular income in which they can invest some money. Please tell here that the income earned on investment in RD is taxed. Both the money invested in RD and the interest earned are taxable.

Rate of interest

Since May last year, the Reserve Bank of India (RBI) has increased interest rates six times in a row. Many banks have increased the interest rates on RD with a period of 5 years. The repo rate has been increased by 2.50 percent. After that most of the banks have increased the interest rates on RD as well.

DCB Bank (DCB Bank)

DCB Bank pays 7.60 per cent interest on RD with a period of five years. It is offering the highest interest on RD among private banks. If you invest Rs 5,000 every month for five years, you will end up with Rs 3.66 lakh.

Suryoday Small Finance Bank

Suryoday Small Finance Bank offers 7.5 percent interest for a five-year RD. Sunrise is offering the highest interest among small finance banks. If you invest Rs 5,000 every month for five years, you will eventually get Rs 3.65 lakh.

IndusInd Bank

IndusInd Bank gives 7.25 percent interest on RD for a period of five years. If you invest Rs 5,000 every month for five years, you will get Rs 3.62 lakh on maturity.

Ujjivan Small Finance Bank

AU Small Finance Bank and Ujjivan Small Finance Bank are paying 7.20 per cent interest on five-year RD. If you invest Rs 5,000 every month, you will get Rs 3.62 lakh on maturity.

Axis Bank

Private banks Axis Bank, HDFC Bank and ICICI Bank are paying 7 percent interest on five-year RD. IDFC First Bank, RBL Bank and Yes Bank are also offering 7 percent interest on 5-year RD. If you invest Rs 5,000 every month, you will eventually get Rs 3.60 lakh.

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Many banks have increased interest rates

You can open RD through offline, online or mobile banking. State Bank of India, HDFC Bank and ICICI Bank have increased the interest on Recurring Deposit ie RD. Now these banks are offering more interest than before. If you are also thinking of investing on RD, then we tell you how much interest you are getting in which bank.

What is RD Scheme?

RD is a small saving scheme. In this, you can also open an account from post office or banks and you can invest in it only for 5 years. On investing money in this, you are given much better interest from the banks and you are given many facilities on getting RD done by the bank. Let us tell you that all banks pay different interest on RD.

SBI RD interest rate

State Bank of India is giving you interest ranging from 6.80 to 7 percent from 12 months to 120 months. In this you will have to invest 100 rupees every month.

PNB RD interest rate

PNB Bank gives interest ranging from 5.5 to 7.25 percent on RDs of 6 months to 10 months. You can pay RD even on the last day of installment.

HDFC Bank RD Interest

HDFC Bank gives you 4.5 to 7.10 percent interest on RD ranging from 6 months to 120 months, in which you have to invest every day.

ICICI Bank RD Interest Rate

ICICI Bank gives you 4.75 to 7.10 percent interest on RDs ranging from 6 months to 120 months. In which you can invest at least 500 rupees.

Yes Bank RD Interest Rate

Yes Bank gives you 6 to 7.50 percent interest on RD ranging from 6 months to 10 years.

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