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Canara Bank Recurring Deposit Interest Rates

Are you looking for an investment that lets you start saving with small amounts, pays you interest from the word go, and also comes with minimal risk? If that’s exactly your idea of a dream investment, then recurring deposits are for you. 

We’ll be completely honest. Recurring deposits and fixed deposits only pay out a marginally higher interest rate than your savings account. The earnings you stand to gain pale in comparison with stocks and mutual funds. However, the interest rate is fixed and guaranteed, and in most cases it even keeps up with or outpaces inflation. This means that your capital is not shrinking as the years go by, and might actually be growing. Moreover, there is minimal risk of capital loss because when you opt for a recurring deposit, you receive a certificate where the bank guarantees you capital repayment and a fixed amount of interest payment by a fixed maturity date. 

Canara Bank RD interest rates anticipated for 2022:


General Public


Senior Citizen

Rate of Interest (% p.a.) Annualised Interest yield (% p.a.) ** Rate of Interest (% p.a.) # Annualised Interest yield (% p.a.) **
7 days to 45 days* 2.90 2.93% 2.90 2.93%
46 days to 90 days 3.90 3.96% 3.90 3.96%
91 days to 179 days 3.95 4.01% 3.95 4.01%
180 days to less than 1 Year 4.40 4.47% 4.90 4.99%
1 year only 5.10 5.20% 5.60 5.72%
Above 1 year to less than 2 years 5.10 5.20% 5.60 5.72%
2 years & above to less than 3 years 5.10 5.20% 5.60 5.72%
3 years & above to less than 5 years 5.25 5.35% 5.75 5.88%

The above rates are as per the bank’s website, but the bank can change the rates at any point of time. Before you go ahead and invest in an RD, do ensure that you have a complete understanding of the concept.

Who should invest in an RD?

If you have a certain financial goal to meet, you can time your RD such that your capital and interest combined will help you meet the said financial goal. Your financial goal might be a holiday, or higher education, or a specialist course, or even retirement. In fact, recurring deposits are very popular among pre-retirees and retirees because these investors are not open to risk (even if they had been high risk investors previously) since they will no longer earn their employment-linked salary. As a result, they look for investments that will grow and that they can tap into in the years to come. 

You might also want to start with an RD (at any age) if you are new to saving and investing. It is a great “gateway investment” that can introduce you to the joys of having your money deliver earnings to you without you lifting a finger. The experience can encourage you to scale up your savings and invest more aggressively. RDs are a great place to start because your capital is safe and you can invest small amounts. You also begin earning interest right away.  You can invest for a period as short as six months. 

An RD is also a great addition to a high risk portfolio of investments. If you have mostly stocks, mutual funds and other investments that come with some amount of risk, it might make sense to opt for some safe, fixed-income investments.

However, if you have decades of steady income ahead of you and already have a few RDs and other fixed income investments in your portfolio, you might want to consider whether you have the stomach to aim for higher growth by exposing yourself to some risk. If not, there is no shame in sticking with safer fixed-income instruments. 

Chief considerations/ tips for choosing your RD

Choose your base installment amount carefully. Most banks do not allow you to invest less than your selected/ committed amount, but they let you invest as much more as you want in any given month. Some even let you invest multiple times in a month. However, there are penalties on not making the committed amount, so choose a lower amount than what you habitually save. 

Shop around and compare the interest rates being offered by a selection of scheduled banks. Compare your Canara Bank RD interest rates with those of SBI and Bank of Baroda, for example. Also compare the fees and charges and penalties that will be deducted from your earnings. 

Conclusion: The Canara Bank RD interest rates are attractive for investors seeking a safe, fixed-income investment option. Competitive interest rates, coupled with reasonable fees and charges make for a good RD option – investors should shop around before settling on any bank’s RD. 

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