For many middle-class families, daily wage earners, and salaried individuals in India, saving money regularly in small amounts is both a habit and a necessity. The State Bank of India (SBI), India's largest public sector bank, offers a secure and rewarding option through its Recurring Deposit (RD) Scheme - ideal for disciplined savers aiming to build a corpus without taking financial risks.
Let's explore how saving as little as ₹100, ₹500, or ₹1000 every month can help you earn thousands in interest over a 5-year period.
SBI's RD scheme allows individuals to deposit a fixed amount every month for a predetermined tenure ranging from 12 months (1 year) to 120 months (10 years). It is best suited for those who want to cultivate a regular saving habit and earn guaranteed returns backed by the bank.
Minimum deposit: ₹100 per month (and in multiples thereof)
Maximum deposit: No fixed upper limit
Tenure options: 12 months to 120 months
Interest rate: Currently around 6.50% p.a. for 5 years (may vary)
Penalty for delayed deposit: Nominal amount per ₹100 (usually ₹1.50 per ₹100 if delayed)
Premature withdrawal: Allowed with reduced interest
Loan/overdraft: Up to 90% of the deposit available as loan after 6 months
Here's a look at what your maturity amount would be if you saved monthly under SBI RD for 5 years (60 months) at 6.50% interest:
|
Monthly Deposit |
Total Deposit |
Interest Earned |
Maturity Amount |
|
₹100 |
₹6,000 |
₹1,106 |
₹7,106 |
|
₹500 |
₹30,000 |
₹5,528 |
₹35,528 |
|
₹1,000 |
₹60,000 |
₹11,057 |
₹71,057 |
✅ Note: Actual returns may slightly vary based on the current interest rate and compounding frequency.
Government-backed safety: SBI is a public sector bank regulated by RBI.
Higher interest than savings accounts
Flexible tenure & minimum deposit suitable even for daily wage earners
Encourages saving discipline with automated monthly deductions
Missed payments attract a small penalty.
If you miss 6 consecutive installments, the RD account may be closed automatically.
Withdrawals before maturity reduce the interest rate.
Tax Deducted at Source (TDS) may apply if interest income crosses the annual limit.
You can open an SBI RD account:
Online via SBI YONO App
Through Internet Banking (onlinesbi.com)
Or by visiting any SBI branch
Documents required:
Valid ID and address proof (Aadhaar, PAN, Voter ID, etc.)
Existing SBI savings account
Whether you're a student, a salaried professional, or someone with a modest income, the SBI Recurring Deposit scheme is a practical tool to build future wealth. Start with as little as ₹100 and stay committed - over time, your savings will not just grow but bring you financial confidence and peace of mind.
|
Feature |
SBI Recurring Deposit |
Post Office Recurring Deposit |
Bank Fixed Deposit (General) |
|
Type of Scheme |
Monthly Deposit |
Monthly Deposit |
One-time Lump Sum Deposit |
|
Minimum Deposit |
₹100/month |
₹100/month |
₹1000 (may vary by bank) |
|
Tenure Options |
12 to 120 months (1-10 years) |
Fixed: 5 years |
7 days to 10 years |
|
Interest Rate (as of 2025) |
~6.50% p.a. (5 yrs) |
6.7% p.a. (fixed for 5 yrs) |
6% - 7.25% (varies by bank and tenure) |
|
Interest Type |
Compounded Quarterly |
Compounded Quarterly |
Compounded Quarterly/Simple |
|
Premature Withdrawal |
Allowed with penalty |
Allowed with penalty |
Allowed with penalty |
|
Missed Payment Penalty |
Yes (₹1.50 per ₹100 approx.) |
Yes (₹1 per ₹100 approx.) |
Not applicable (lump sum investment) |
|
Loan/Overdraft Facility |
Available after 6 months |
Not available |
Available in some banks |
|
TDS Applicability |
Applicable if interest > ₹40,000/year |
No TDS (but taxable under IT Act) |
Applicable if interest > ₹40,000/year |
|
Tax Benefit under 80C |
No |
No |
Only on Tax-saving FDs (5-year lock-in) |
|
Account Opening |
Online & Branch |
Only at Post Office |
Online & Branch |
|
Best For |
Monthly savers, flexible tenure |
Risk-averse, fixed-term savers |
One-time investors, short or long term |
|
Your Need |
Best Option |
|
Want to save monthly with flexible tenure |
SBI RD |
|
Want guaranteed returns and government backing |
Post Office RD |
|
Have a lump sum to invest for high returns |
Bank FD |
|
Need tax benefits |
Tax-saving Bank FD (5 yrs) |
SBI RD offers more flexibility in tenure and monthly contribution.
Post Office RD is ideal for people in rural areas with no online banking.
Bank FDs give higher returns for longer tenures but require one-time investment.