SBI vs HDFC Bank vs Axis Bank: Which bank offers the best interest rates on recurring deposits?

A recurring deposit can be a good tool to steadily work towards a near-term financial goal. This is a special kind of term deposit where you deposit a fixed amount of money every month for a pre-defined time period, at the end of which you get back a lumpsum amount - the principal plus interest earned. According to Yes Bank, such deposits provide the perfect savings-cum-investment opportunity for people with a fixed income, who plan to meet certain financial goals or provide for liabilities in the future. However, keep in mind that although a recurring deposit can be a good investment tool, in the long run it does not help you beat inflation.

Here's a look at what different leading banks are offering on their recurring deposit schemes and a comparison with the Post Office option.

Yes Bank

Minimum tenure: 6 months

Maximum tenure: 10 years

Missed instalment: Penalty of 1 per cent will apply on the pre-contracted interest rate for that particular instalment

HDFC Bank

Minimum deposit: Rs 1,000, and multiples of Rs 100 thereafter

Maximum deposit: Rs 14,99,900 per month

Minimum tenure: 6 months, and in multiples of 3 months thereafter.

Maximum tenure: 10 years

SBI

Minimum deposit: Rs 100, and in multiples of Rs 10 thereafter

Maximum investment: No ceiling

Minimum tenure: 12 months

Maximum tenure: 120 months

Missed instalments: Rs 1.50 per Rs 100 per month for accounts of 5-year tenures or less; Rs 2 per Rs 100 per month for longer tenures

Axis Bank

Minimum deposit: Rs 500 and in multiples of Rs 500 thereafter

Minimum tenure: 6 months

Maximum tenure: 10 years

Missed instalment: Penalty at Rs 10 per Rs. 1000 per month for the period of delay

Post Office 5-year Recurring Deposit

Minimum deposit: Rs 10 per month, or in multiples of Rs 5 thereafter

Maximum deposit: No ceiling

Tenure: 5 years

Interest rate (quarterly compounded): 6.9%, so on maturity a deposit of Rs 10 will fetch Rs 717.43. Moreover, the account can be continued for another 5 years on year to year basis

Missed instalment: A default fee of 5 paise for every Rs 5 shall be charged

Additional feature: One withdrawal up to 50% of the balance allowed after one year