Post Office Recurring Deposit interest rates vs SBI, HDFC, ICICI, PNB, BoB in July 2025: Which is better?

Recurring Deposit (RD) enables investors to save a fixed amount every month and earn interest on such deposits.

Amid the rising popularity of equity SIPs, RD has lost some of its charm, but it continues to be used by many savers to accumulate funds, especially for short-term needs.

One can open an RD account in a bank or a post office. However, rules and interest rates on RDs vary across different financial institutions.

For instance, banks offer RDs of as small as well as large tenures up to 10 years. However, the post office offers an RD account maturing in 5 years.

Further, the interest rate of bank RDs is generally similar to the FD of comparable tenure. But in the case of the Post Office, the interest is currently fixed at 6.7% for a 5-year recurring deposit.

Due to a reduction in fixed deposit interest rates by banks in the past six months, their RD rates for different tenures have also declined. However, the interest rate of Post Office RD has remained unchanged at 6.7% since October 1, 2023.

Please note that the interest rate of Post Office RDs can be reviewed and revised every quarter, whereas banks also review their RD rates periodically.

For comparison, we look at the interest rate of 5-year RDs in the post office and some top banks like the State Bank of India, HDFC Bank, ICICI Bank, Punjab National Bank, and Bank of Baroda.

Source: Respective websites of financial institutions accessed on July 2, 2025.

The above table shows that the post office is currently offering the highest interest rate on RDs of a 5-year duration. If you want to start an RD of a different tenure, then you should compare rates among banks before depositing.