Best Bank for Recurring Deposit

I intent to open a recurring account so that I can accumulate some amount by saving a little each month to be payed later after a year as an LIC policy installment. I scoured over 3 banks to look for which of them provide the best interest rates.
Here’s what I discovered:
huge.49.248446

ICICI Bank (http://www.icicibank.com/interest-rates.html) :

Rates of Interest (% p.a.) w.e.f January 26, 2013
Maturity Period
General
Senior Citizen**
6 months 7.00 7.50
9 months 7.00 7.50
12 months 7.50 8.00
15 months 9.00 9.50
18 months 9.00 9.50
21 months 9.00 9.50
24 months 8.75 9.50
27 months 8.75 9.50
30 months 8.75 9.50
33 months 8.75 9.50
3 years to less than 5 years 8.75 9.50
5 years upto 10 years 8.50 9.25

 
Citibank (https://www.citibank.co.in/servlets/DCGOutputServlet?txRx=txRx) :

Recurring Deposits
These rates are updated as of 16-MAR-2013
Tenure In Months 12 13 14 15 16 17 18 19 20 21 22 23 24
For amount <15 lakh* 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25%

 
Canara Bank (http://www.canarabank.com/English/Scripts/DepositAccounts.aspx) :
 

2. TERM DEPOSITS
A. Domestic Rate of Interest (%) p.a.
For Deposits less than Rs.15 lakh
w.e.f. 08.03.2013
Term Deposits (All Maturities) General Public Senior Citizen
Rate of
Interest (% p.a)
Annualised
Interest yield **
Rate of
Interest (% p.a)
Annualised
Interest yield **
7 days to 14 days *

4.00

4.00

4.50

4.50

15 days to 30 days

4.50

4.50

5.00

5.00

31 days to 45 days

7.00

7.00

7.50

7.50

46 days to 90 days

7.50

7.50

8.00

8.00

91 days to 179 days

8.00

8.00

8.50

8.50

180 days to 269 days

7.25

7.32

7.75

7.83

270 days to less than 1 year

9.00

9.20

9.50

9.73

1 year & above to less than 2 years

9.05

9.36

9.55

9.90

2 years & above to less than 3 years

9.05

9.80

9.55

10.39

3 years & above to less than 5 years

9.05

10.27

9.55

10.91

5 years & above to less than 8 years

9.05

11.29

9.55

12.06

8 years & above to 10 years

9.05

13.08

9.55

14.10

 
Now I am confused between because of following points:
1. Why is there so much disparities between rates?
2. Does “Term deposit” a term used by Canara Bank for “Recurring deposit”?
3. What is Annualised Interest yield?
So far, ICICI bank is luring me to open a recurring account with them because of their high interest rate of 9% on 15 month term. But I don’t know if there’s a catch if any. Since I am not sure about if the interest rates described above is for recurring account or not. Further investigation is under the way.

Leave a Reply

Your email address will not be published.