Union Bank Fixed Deposit

Union Bank of India offers multiple fixed deposits for various tenures with different interest rates to its investors. The interest rate on Union Bank of India FDs is higher in their savings account. One can invest in Union Bank FDs through both online and offline modes with just a minimum investment of INR 100. This article covers Union Bank of India FD, its features and interest rates in detail.

Union Bank of India Fixed deposit schemes

Following are the Union Bank of India Fixed Deposit Schemes:

• Short Deposit Receipt (SDR)
• Fixed Deposit Receipt
• Monthly Income Scheme
• Tax Saver Deposit
• Deposit Re-investment Certificate (DRIC)
• Easy Tax Saver Deposit
• Cumulative Deposit
• Money Flex Deposit Scheme

Union Bank of India Short Deposit Receipt (SDR)

• The minimum deposit tenure is seven days, while the maximum deposit tenure is 179 days.
• The minimum deposit amount is INR 1,000, while there is no limit on the maximum amount.
• For a short deposit receipt account, the interest is computed quarterly, however, paid half-yearly.
• The account allows the nomination facility and also allows the depositor to avail loan against the deposit amount.
• The deposit account will be auto-renewed for the same period at the applicable interest rate on the maturity date. This is done only in the absence of specific instructions. The scheme allows premature closure, however, with a penalty, if any.

Union Bank of India Fixed Deposit Receipt

• The minimum deposit tenure is six months, while the maximum deposit tenure is 120 months.
• The minimum deposit amount is INR 1,000, while there is no limit on the maximum amount.
• The interest is paid either half-yearly or quarterly for a fixed deposit receipt account as per the instructions.
• A nomination facility is available with this account, and also it allows the depositor to avail loan against their deposit amount.
• The deposit account automatically renews for the same period at the applicable interest rate on the maturity date. This happens only in the absence of specific instructions. The scheme allows premature closure. However, a penalty may be charged, if any.

Union Bank of India Monthly Income Scheme

• The minimum deposit tenure is twelve months, while the maximum deposit tenure is 120 months.
• The minimum deposit amount is INR 1,000, and in multiples of INR 100 thereafter. Furthermore, there is no limit on the maximum amount.
• For the monthly income scheme, the interest is paid monthly at a discounted value.
• The nomination facility is available as per the guidelines. Also, the scheme allows depositors to avail loans against their deposit amount.
• The deposit account automatically renews for the same period at the applicable interest rate on the maturity date. This happens only in the absence of specific instructions. The scheme allows premature closure. However, they attract penalty.

Union Bank of India Tax Saver Deposit

• The tax saver deposit scheme gives the depositor the benefit of tax exemption under Section 80C of the Income Tax Act.
• The minimum deposit tenure is five years, while the maximum deposit tenure is ten years.
• The minimum deposit amount is NR 5,000, and in multiples of INR 5,000 thereafter. Also, the maximum limit is INR 1,50,000 in a financial year.
• The loan against this deposit scheme is allowed only after the lock-in period of five years.
• Also, premature closure is available only in case of the death of the primary account holder. Furthermore, there is no penalty for such closures.

Union Bank of India Deposit Re-investment Certificate (DRIC)

• The minimum deposit tenure is six months, while the maximum deposit tenure is 120 months.
• The minimum deposit amount is INR 1,000, and there is no limit on the maximum amount.
• For DRIC, the interest is computed and compounded quarterly. The interest amount is credited half-yearly.
• The nomination facility is available as per the guidelines. Also, the scheme allows depositors to avail loans against their deposit amount.
• The deposit account will be auto-renewed for the same period at the applicable interest rate on the maturity date. This is done only in the absence of specific instructions. The scheme allows premature closure, and the interest is paid for the run period. However, a penalty may be charged, if any.

Union Bank of India Easy Tax Saver Deposit

• The easy tax saver deposit scheme provides flexibility to the depositor to invest through monthly instalments. The account shall be in a continuous format. In other words, the depositor can start by investing a minimum of INR 1,000 and in multiples of INR 1,000 thereafter. Also, the maximum limit is INR 1,50,000 in a financial year.
• Furthermore, the deposits have a lock-in period of five years.
• Depositors cannot avail loans against this deposit account. Premature closure is available only in case of the death of the primary account holder. Furthermore, there is no penalty for such closures.

Union Bank of India Cumulative Deposit

• The cumulative deposit account mainly aims at the lower, lower-middle, middle, upper-middle, and salaried sector. It encourages small investors to save monthly over a fixed period of time.
• The minimum deposit tenure is six months, while the maximum deposit tenure is 120 months.
• The minimum deposit amount is INR 50, and there is no limit on the maximum amount.
• The interest is compounding on a quarterly basis and credits half-yearly.
• Additionally, the scheme doesn’t charge any penalty for delay or non-deposit of the monthly instalment amount.
• The nomination facility is available as per the guidelines. Also, the scheme allows depositors to avail loans against their deposit amount.
• The scheme allows premature closure, and the interest is paid for the run period. However, they attract penalty. Also, for closure within a month of account opening, no interest shall be paid.

Money Flex Deposit Scheme

The Money Flex Deposit scheme is designed to provide depositors with a higher rate of return on their savings than any other term deposit scheme. The scheme also allows them to withdraw a portion of their deposit at any time before maturity without having to close the account prematurely.

• Eligibility- Individual, joint account holders, minor along with guardians. Non-individuals such as educational institutions, trusts, HUFs, firms, partnerships, joint stock companies, co-operatives, executors and administrators, Government Departments
• Minimum investment period is 6 months
• Maximum investment period is 10 years
• Minimum investment amount is Rs 25,000 in multiples of Rs 1000/- thereafter.
• Maximum investment amount is less than Rs 2 crores. 
• Loan or advance of deposit is not available
• Nomination, auto-renewal, and premature withdrawal are allowed.

Key Features of Union Bank of India Fixed Deposit Schemes

Tenure: The tenure of an Union Bank FD ranges from seven days to ten years. Also, one cannot change the tenure of their Union Bank FD once it has commenced.

Minimum and maximum investment: The minimum investment in Union Bank FD is INR 100. However, there is no limit on the maximum amount of investment except for Union Bank tax saving FD, which is INR 1,50,000.

Union Bank of India FD rates: Union Bank FD rates range between 3% and 5.6% for regular citizens and between 3.75% and 6.1% for senior citizens. Moreover, Union Bank offers an additional 0.5% interest to senior citizens on their FDs. Union Bank pays interest every quarter in the months of April, July, October and January every year.

Premature withdrawal: All Union Bank FDs can be withdrawn prematurely except for the tax saving FD. The bank charges a penalty of 1% if the deposits of INR 2 crore and below are withdrawn before the completion of FD tenure but after seven days. If the deposits are withdrawn before the completion of 7 days, then there is no penalty.

Loan against FD: Union Bank offers loans against their FDs. Investors can get up to 90% of the deposit amount as a loan against their Union Bank FD investment.

Nomination facility: Union Bank FD investors can nominate beneficiaries for their FDs.

Auto-renewal: Investors can opt for auto-renewal of their Union Bank FDs.

Safety: The Deposit Insurance Scheme of RBI covers all Union Bank deposits. The scheme covers all Union Bank deposits up to INR 5,00,000.

Additional payments: Investors cannot deposit an additional amount in a Union Bank FD once it has commenced. However, they can open a fresh Union Bank FD with the new amount.

How to open a Union Bank of India FD deposit account?

One can open a Union Bank of India FD account through various modes such as Internet Banking, Mobile App and offline.

Internet Banking

The following steps will help an individual to open a Union Bank of India FD account through internet banking:

• Login to the Union Bank of India NetBanking account.
• In the main menu, select the ‘Fixed Deposit’ option.
• Provide all the relevant information, nominee details and maturity instructions.
• Click on ‘Submit’ to complete the deposit opening process. A confirmation message will be displayed upon successful booking.

Through Mobile App

Union Bank of India App

The following steps will guide in opening an FD account through the Union Bank of India Mobile App:

• Download the Union Bank of India App and log in.
• Select the ‘Fixed Deposit’ option and provide all the relevant information, nominee details and maturity instructions.
• Click on ‘Submit’ to complete the deposit opening process. A confirmation message will be displayed upon successful booking.

Offline Union Bank of India FD Opening

To open a Union Bank of India FD account offline, one has to visit the nearest Union Bank of India branch. Fill the Union Bank of India FD application form and submit all the necessary documents along with the deposit amount. On successfully processing the application, the Union Bank of India will provide an FD receipt.

Documents required to open a Union Bank of India FD

Following are the documents that one require to open a fixed deposit account in Union Bank of India:

• FD application form
• Address proof as per KYC norms. (Telephone bill, Aadhar card, Bank Statement with cheque, Electricity bill)
• Pan Card or a declaration in Form No. 60 or 61 of the Income Tax Act
• Identity Proof as per KYC norms. (PAN Card, Passport, Aadhar Card, Driving License, Voter ID Card)
• Senior Citizen ID Card (for senior citizens)
• 2 Photographs
• Any other documents applicable to the company, partnership, HUF, trust, association, proprietorship, or institution etc. 

Eligibility to Open a Union Bank of India FD

Following is the eligibility criteria for opening a Union Bank FD is

• Any Resident Individual including illiterate persons, purdanasheen ladies, Minors, and blind persons – Single Account
• Two or more individuals in Joint Accounts
• Associations, Societies, Clubs, etc.
• Institutions/Agencies, Trusts, permitted explicitly by the RBI eligible to open a Fixed Deposit account in single/joint names.

Does Union Bank offer Recurring Deposits?

Union Bank offers recurring deposits to its depositors. Union Bank recurring deposits have a minimum tenure of six months and a maximum tenure of ten years. Depositors can open an RD account either by going to the Union Bank branch or online using internet banking. The interest rate for regular citizens on Union Bank RDs is in the range of 4.5% to 5.6%, and for senior citizens, it is in the range of 4.6% to 5.6%.

Is FD interest taxable?

Only investment in Union Bank Tax Saving FD qualifies for tax saving up to INR 1,50,000 per annum. Also, investment in no other Union Bank FDs qualifies for tax saving under Section 80C of the Income Tax Act. Furthermore, the interest income from Union Bank FD is taxable as per the investor’s income tax slab rates. Moreover, the interest income is subject to a TDS of 10% if the income from Union Bank FD exceeds INR 40,000 per annum. For senior citizens, the limit is INR 50,000 per annum. Also, if the investor doesn’t disclose PAN Card details to the Union Bank, then the TDS rate will be 20%.

How many years FD will double?

To know in how many years Union Bank FD will double, we can follow the 72 rule. We have to divide 72 by the interest rate, and the result will be the number of years Union Bank FD will double. For example, for a tenure of 5-10 years, the Union Bank FD interest rate for senior citizens is 6.1%. An investor can double the investment amount by investing for this tenure in Union Bank FD in 11.80 years (72/6.1).

Frequently Asked Questions