Recurring deposits (RDs) are a safe, disciplined way to build savings with small monthly contributions rather than a large lump sum. Federal Bank’s Federal Savings Fund scheme offers recurring deposits with assured returns and flexible tenures that extend up to 10 years, making it a practical option for steady wealth creation.
The Federal Bank RD interest rates effective 18 August 2025 reach up to 6.70% for select tenures. Senior citizens receive an additional 0.50% on most slabs, which enhances retirement income and financial security.
Below you will find the Federal Bank recurring deposit interest rates for 2025, details on rates for regular customers and senior citizens, NRE account provisions, account types, benefits, and practical notes to consider before opening an RD.
About Federal Bank
Federal Bank, headquartered in Aluva, Kerala, is one of India’s established private sector banks. It provides a broad range of services across retail and wholesale banking, treasury functions and more. Among its products, recurring deposits are preferred by customers who want predictable, low-risk returns and a disciplined saving habit.
With a Federal Bank RD you can start with a modest monthly deposit, choose a tenure from 7 days up to 10 years, and earn assured interest. The bank also permits loans against the RD balance, offering liquidity without breaking the saving pattern.
Federal Bank RD Interest Rates 2025
Federal Bank RDs earn the same interest rate as the Resident Term Deposit for the corresponding tenure. The rates below are effective from 18 August 2025 and apply under the Federal Savings Fund scheme.
| Tenure | General Public (p.a.) | Senior Citizens (p.a.) |
|---|---|---|
| 7 days to 29 days | 3.00% | 3.50% |
| 30 days to 45 days | 3.25% | 3.75% |
| 46 days to 90 days | 4.25% | 4.75% |
| 91 days to 180 days | 4.50% | 5.00% |
| 181 days | 6.00% | 6.50% |
| 182 days to 270 days | 5.75% | 6.25% |
| 271 days to less than 1 year | 6.00% | 6.50% |
| 1 year | 6.40% | 6.90% |
| Above 1 year to 749 days | 6.50% | 7.00% |
| 750 days | 6.60% | 7.10% |
| 751 days to 998 days | 6.50% | 7.00% |
| 999 days | 6.70% | 7.20% |
| 1000 days to 10 years | 6.50% | 7.00% |
These rates apply to domestic resident customers and offer predictable returns suitable for goal-based planning.
Federal Bank RD Interest Rates for Senior Citizens
Senior citizens receive an additional 0.50% on most rate slabs. This uplift is intended to support financial independence and boost retirement income. For example, a base rate of 6.50% becomes 7.00% for senior citizens, and a base of 6.70% becomes 7.20%.
Federal Bank RD Interest Rates for NRE Accounts
Non-Resident External (NRE) customers can open recurring deposits under schemes such as Fed Flexi Smart SaverRD. NRE RDs follow the same rate structure as NRE term deposits for the chosen tenure, allowing NRIs to grow rupee-denominated savings while keeping funds repatriable.
Types of Federal Bank RD Accounts
Federal Bank provides flexible RD tenures that can be grouped broadly into three categories:
- Short-term RDs: Typically from 6 months to less than 1 year. These offer lower rates but greater liquidity.
- Medium-term RDs: Usually from 1 year to 3 years. These tend to provide higher returns for both residents and senior citizens.
- Long-term RDs: From 3 years up to 10 years. Suitable for building corpus for long-term goals.
Benefits of a Federal Bank RD
- Low entry requirement: Start with a small monthly instalment.
- No upper deposit limit: You can increase deposits based on your capacity.
- Disciplined savings: Regular installments enforce a saving habit.
- Loan against RD: Avail of loans using your RD balance as collateral.
- Senior citizen advantage: Higher interest rates for customers above 60 years.
- Liquidity option: Premature closure is allowed subject to a penalty.
- Guaranteed returns: No market risk; interest is fixed for the chosen tenure.
Example of RD Earnings
For illustration: if you deposit ₹5,000 every month into a Federal Bank RD for 3 years at 6.50% p.a., the maturity amount would be approximately ₹1.99 lakh, including interest. This demonstrates how steady monthly savings compound into a meaningful sum over time.
What to Remember Before Opening a Federal Bank RD
- Interest is compounded quarterly and paid at maturity.
- Premature closure typically attracts a penalty of 1% on the applicable rate if the deposit has been held beyond 15 days; no interest is paid if closed within 15 days.
- TDS is applicable if annual interest exceeds the threshold (₹40,000 for general taxpayers, ₹50,000 for senior citizens). Submit Form 15G or 15H if you qualify for exemption.
- Interest rates are subject to change based on RBI policy and the bank’s decisions. Verify the effective rates before booking an RD.
How to Open a Federal Bank RD
You can open an RD through multiple channels for convenience:
- FedMobile app
- FedNet internet banking
- Feddy, the bank’s virtual assistant
- Your nearest Federal Bank branch
To open an RD, choose your tenure, set the monthly instalment amount and confirm the instruction. The RD becomes active immediately and continues as per the schedule.
Federal Bank recurring deposits are a straightforward, low-risk tool to grow savings systematically. With competitive rates, additional benefits for senior citizens and NRE options for non-resident customers, RDs suit a wide range of savers seeking predictable returns.
FAQs on Federal Bank RD Interest Rates
Is there a penalty for late or missed RD instalment in Federal Bank?
Yes. If you miss or delay instalments, penalties may apply and the maturity value will be reduced depending on the number and duration of missed payments.
Is tax deducted at source (TDS) on RD interest in Federal Bank?
TDS is deducted if your annual interest income crosses the statutory exemption limit. Senior citizens have a higher exemption threshold. Eligible taxpayers can submit Form 15G or 15H to avoid TDS, subject to conditions.
How often does Federal Bank revise its RD interest rates?
Federal Bank revises deposit rates periodically, often in response to RBI policy changes. Always check the bank’s current rate information before making a deposit decision.