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Bank of Baroda RDs allows an investor to invest a small amount every month. Upon maturity, the investor will earn interest on the entire investment. The BOB RD tenure ranges from 6 months to 10 years, and the bank RD interest rates vary with the tenure. Furthermore, one can estimate returns from the bank recurring deposits using the recurring deposit calculator. This article cover about BOB RD and its interest rates in detail.

Bank of Baroda RD Interest Rates 2021

Following are the RD interest rates of Bank of Baroda

Bank of Baroda RD interest rates ranges between 4.5% to 5.7% for a tenure of 6 months to 10 years for regular citizens. For the same tenure, the senior citizen RD rates range between 5% to 6.2%. Bank of Baroda offers senior citizens additional interest of 0.5% on their FD investments. The interest on Bank of Baroda RD is compounded quarterly and paid upon maturity. Furthermore, one can estimate returns from the bank recurring deposits using the recurring deposit calculator. Also, the RD rates of Bank of Baroda are higher than their savings account. Bank of Baroda RD rates depend on the tenure of the investment, age of the investor, RBI policies, and the country’s current economic conditions.

Interest income of Bank of Baroda RDs is taxable as per the individual investor’s income tax slab rates. Investors have to show the interest income from their RD investment under the head ‘Income from Other Sources’ while filing their income tax returns. Moreover, the Bank of Baroda deducts a TDS of 10% if the interest income exceeds INR 40,000 for regular citizens. The TDS threshold limit for senior citizens on their interest income is INR 50,000. Also, the rate of TDS is 10% if the investor submits the PAN details. Else, the rate of TDS that the Bank of Baroda cuts is 20%.

TenureGeneral RD RatesSenior Citizen RD Rates
180 days4.50%5.00%
181 days to 364 days5.00%5.50%
1 year to 10 years5.70%6.20%
Note: Bank of Baroda RD interest rate is subject to change

BOB Recurring Deposits

Following are the key features of Bank of Baroda recurring deposits:

Tenure

The BOB recurring deposit tenure ranges between 6 months to 120 months.

Minimum and Maximum Deposit Amount

The minimum amount of investment in BOB RD is INR 50. Also, there is no limit on the maximum deposit amount.

BOB Recurring Deposit Rate

The Bank RD interest rates are in the range of 4.50%-5.70%. Furthermore, one can estimate returns from the bank recurring deposits using the RD calculator.

Preferential Interest Rates

Bank of Baroda offers preferential interest rates for senior citizen depositors. Senior citizens are eligible to get an additional 0.5% on BOB RD investments. The BOB recurring deposit rate for senior citizens is in the range of 5.00%-6.20%.

Tax and TDS

BOB RDs do not qualify for tax saving. The interest income from RDs is taxable as per investor’s income tax slab rates. Moreover, BOB deducts a TDS of 10% if the interest income per annum exceeds INR 40,000 (INR 50,000 for senior citizens). The 10% TDS rate is applicable only if PAN details are submitted; else the bank cuts TDS at 20%.

One can determine whether BOB RD interest income is above or below the TDS threshold limit using the RD calculator. Also, investors can estimate their income tax liability using the Scripbox Income Tax Calculator.

Premature withdrawal

BOB allows investors to prematurely withdraw their recurring deposits. However, BOB charges a penalty of 1% for prematurely withdrawing from the account.

Nomination Facility

Depositors can nominate beneficiaries for their Bank of Baroda RDs.

Convenience

Opening and managing the recurring deposit investments is easy and convenient through the bank’s online portal.

Loan against RD

BOB allows investors to take a loan against recurring deposits. One can get a loan up to 95% of the outstanding balance. This will help in meeting liquidity requirements. Furthermore, it avoids the hassle of applying for a new loan.

Investors can take loans such as loan against property (home loan), education loans, motor loans, etc., against BOB RD. Also, one can estimate the loan EMI using the loan EMI calculator. Furthermore, the loan EMI calculator works as a personal loan EMI calculator, home loan calculator, and also car loan calculator. The investor can use the EMI calculator for comparing different scenarios by changing the variables such as interest rate.

Requirements of Bank of Baroda RD Scheme

Eligibility

All individuals and non-individuals are eligible to invest in Bank of Baroda RDs. Following is the list of eligible persons.

  • Individuals, including minors above the age of 10.
  • Minor below the age of 10 with a guardian
  • Clubs, educational institutions, associations, and trusts
  • Partnership firms, joint stocks companies and sole proprietorship firms

Deposit and account

To open an RD account with Bank of Baroda, one needs to invest a minimum of INR 50 in rural branches and INR 100 in urban branches. There is no upper limit for investment. Also, the bank charges a penalty for delayed instalments. The penalty ranges between INR 1 – INR 100 per month.

Documents

Following are the documents required to open an RD account with BOB:

  • Passport size photo
  • ID proof – PAN Card, Passport, Aadhar Card, Voter ID, Government ID proof
  • Address proof – Passport, utility bills, bank statement with cheque and aadhar card.

Withdrawal

Bank of Baroda charges a penalty for premature withdrawal of RD investments. The penalty is 1% on the interest rate.

Tax

Investment in Bank of Baroda RDs is not eligible for tax exemption under Section 80C of the Income Tax Act, 1961. Moreover, the interest income from Bank of Baroda RD is taxable as per the individual investor’s income tax slab rates. Investors of Bank of Baroda recurring deposit have to show their interest income under the head ‘Income from Other Sources’.

Also, the interest income from the Bank of Baroda RD is subject to TDS. The TDS rate is based on whether the investor has disclosed the PAN details to the Bank of Baroda or not.

If the investor submits the PAN Card details to Bank of Baroda, then the applicable TDS rate is10%, if the interest income exceeds INR 40,000 (for regular citizens). For senior citizens, the TDS limit is INR 50,000.

If the investor doesn’t submit the PAN Card details to Bank of Baroda, then the applicable TDS rate is 20% if the interest income exceeds INR 40,000 (for regular citizens). For senior citizens, the TDS threshold limit is INR 50,000.

Nomination

Bank of Baroda allows investors to nominate beneficiaries for their RD investment.

Types of Deposit Schemes

BOB offers the following recurring deposit schemes:

Recurring Deposit

The scheme allows an individual to invest a small amount of money. With this scheme, one can make monthly deposits for a fixed duration and earn interest.

  • Tenure: 6 months – 12 months
  • Minimum Deposit Amount: INR 50 and in its multiples thereafter for rural and semi urban branches. INR 100 and in its multiples thereafter for the urban and metro branch.
  • Maximum Deposit Amount: No limit
  • Loan facility: Available up to 95% on the deposit balance
  • Tax Deducted at Source: Applicable. No TDS is deducted if the depositor submits Form 15G/ 15H.
  • Nomination Facility: Available
  • Premature closure: Applicable, however the interest rates are lower.
  • Penalty for late deposits: INR 1 for INR 100 per month, irrespective of the tenure.

Flexible Recurring Deposit Scheme – Yatha Shakti Jama Yojana

This is a flexible recurring deposit account that has a flexible monthly instalment mode. Also, a regular RD can be converted to Yatha Shakti Jama Yojana scheme.

  • Tenure: 12 months – 120 months
  • Minimum Deposit Amount: INR 100 and in multiples of INR 100 thereafter.
  • Maximum Deposit Amount: Monthly deposit amount can only be increased only up to three times of the core instalment subject to a maximum of Rs.10,000/- per month.
  • Loan facility: Available up to 95% on the deposit balance
  • Tax Deducted at Source: Applicable. No TDS is deducted if the depositor submits Form 15G/ 15H.
  • Nomination Facility: Available
  • Premature closure: Applicable, however the interest rates are lower.
  • Penalty for late deposits: No penalty.

Is there a difference between the interest rates for Recurring Deposit and Fixed Deposit?

BOB offers varying interest rates for RDs and FDs. Following are BOB recurring deposit interest rates:

TenureGeneral RatesSenior Citizen Rates
180 days4.50%5.00%
181 days to 270 days5.00%5.50%
271 days to 364 days5.00%5.50%
1 year5.70%6.20%
1 year 1 day to 400 days5.70%6.20%
401 days to 3 years5.70%6.20%
3 years 1 day to 5 years5.70%6.20%
5 years 1 day to 10 years5.70%6.20%

Following are the BOB bank fixed deposit interest rates:

TenureFixed Deposit Interest RatesSenior Citizen FD Interest Rates
7 days to 14 days2.80%3.30%
15 days to 45 days2.80%3.30%
46 days to 90 days3.70%4.20%
91 days to 180 days3.70%4.20%
181 days to 270 days4.30%4.80%
271 days to 364 days4.40%4.90%
400 days to 2 years5.00%5.50%
1 year4.90%5.40%
1 year 1 day to 400 days5.00%5.50%
2 years 1 day to 3 years5.10%5.60%
3 yrs 1 day to 5 yrs5.25%5.75%
5 yrs 1 day to 10 yrs5.25%5.75%

Conclusion

BOB RD is an excellent investment alternative for investors who want to save small amounts regularly. Also, since Bank of Baroda RDs guarantee returns, they are low risk investments. Hence investors looking for guaranteed returns can invest in BOB RDs. However, the interest income from the Bank of Baroda RD investments is subject to TDS and taxes. Therefore, investors have to consider the taxes they have to pay before investing in these investments.

Frequently Asked Questions

What are the limits on the minimum and maximum deposits?

Yes, BOB RD account requires a minimum deposit amount of INR 50 per month. However, there is no limit on the maximum deposit amount.

Can I open a recurring deposit account for a minor?

Yes, one can open a BOB RD account on behalf of a minor. The RD account can be opened in the name of a minor who is above ten years. The maximum limit for such an RD scheme is INR 1,00,000.

How to apply for BOB RD?

One can open a BOB RD account through offline and online modes. For online mode, one has to visit the Bank of Baroda’s website. And for offline mode, one has to visit the nearest branch of Bank of Baroda.
To be able to invest in Bank of Baroda RD, one needs to have all valid documents. For identity proof, one needs to have a PAN Card, Passport, Aadhar Card, Voter ID, Government ID proof. For address proof, one needs to have a Passport, utility bills, bank statement with cheque and Aadhar card.

Is it possible to renew an RD account?

No, it is not possible to renew a Bank of Baroda RD account.