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Indian Bank FD – Interest Rates, Features, Types of FDs and FAQs

indian bank fd rates

Introduction

Indian Bank FD scheme offers higher interest rates than its savings account. Moreover, it offers an additional 0.5% additional interest rate for senior citizens. The minimum deposit in Indian bank FD is INR 100, and there is no limit on the maximum deposit amount. Interest on Indian Bank FD is subject to tax as per individual income tax slab rates. In this article, we have covered about Indian Bank FD in detail.

Indian Bank FD rates 2020

TenureFixed Deposit Interest RatesSenior Citizen Fixed Deposit Interest Rates
7 days to 14 days2.90%3.40%
15 days to 29 days3.05%3.55%
30 days to 45 days3.05%3.55%
46 days to 90 days3.05%3.55%
91 days to 180 days3.95%4.45%
181 days to 269 days4.45%4.95%
9 months to 364 days4.45%4.95%
1 year5.15%5.65%
1 year 1 day to 1 year 364 days5.25%5.75%
2 years to 2 years 364 days5.25%5.75%
3 years to 4 years 364 days5.15%5.65%
5 years to 10 years5.15%5.65%

Note: Indian Bank revises FD interest rates periodically 

Indian Bank FD interest rates range from 2.9% to 5.25% for regular citizens for a tenure of 7 days to 10 years. For the same tenure, senior citizen FD rates range from 3.4% to 5.75%. Indian Bank pays an additional 0.5% interest rate on FDs of senior citizens. The FD interest rates of Indian Bank are higher than their savings account rates.

Interest on Indian Bank FD is taxable as per the individual’s income tax slab rates. Furthermore, there is a TDS of 10% on interest income exceeding INR 40,000 (INR 50,000 for senior citizens). If PAN details are not submitted, then the TDS rate will be 20%.

Tax saving FDs are the only FDs that qualify for tax exemption under Section 80C of the Income Tax Act. They can claim the same while filing income tax returns. No other Indian Bank FD schemes qualify for tax saving under Section 80C of the Income Tax Act.

Key Features of Indian Bank Fixed Deposit

Indian Bank Fixed Deposit accounts are suitable for investors looking at better returns than a bank saving account. Indian Bank fixed deposit schemes offer guaranteed income to their depositors at a fixed interest rate.

Following are the key features of Indian Bank Fixed deposit account:

Tenure: The tenure ranges between seven days to 2 years 364 days

Minimum Deposit Amount: The minimum amount to open an FD with Indian Bank is INR 100.

Maximum Amount: No limit

Indian Bank FD Interest Rate: This savings scheme offers interest rates in the range of 2.90% p.a to 5.25% p.a.

Preferential Interest Rates: The bank offers preferential interest rates to its senior citizen depositors. The FD interest rates range between 3.40% p.a to 5.75% p.a.

Safety: Deposits in Indian Bank up to INR 5,00,000 are covered under the Deposit Insurance Scheme of RBI.

Loan against FD: Indian Bank offers loans against FD. This is to help depositors meet their liquidity requirements. 

Premature Withdrawal: Indian Bank allows depositors to withdraw their deposit amount prematurely. However, the facility comes with a penalty. Also, the provisions are subject to change from time to time.

Nomination Facility: Indian Banks allows depositors to nominate beneficiaries for the deposits.

Auto-Renewal: Indian Banks provides the auto-renewal facility of the FD account.

Convenience: Depositors can open Indian Bank FD investment online at their convenience. Depositors can create an account and fill the online application form to start their FD investments.

Types of Fixed Deposit Schemes offered by Indian Bank

  • Reinvestment deposit scheme
  • Regular fixed deposit scheme
  • Term deposit scheme
  • Tax saver term deposit scheme

Types of Fixed Deposit Schemes: In Detail

Reinvestment deposit scheme

  • It is a term deposit scheme. The scheme reinvests all the earned capital gains, dividends, and interest in buying shares or units rather than paying cash.
  • Minimum deposit amount is INR 100 and no limit on the maximum deposit amount.
  • The tenure ranges between six months to ten years.
  • The interest on the deposit is compounded every quarter.
  • The scheme has auto renewal and nomination facility.
  • Depositors can take a loan up to 90% of the deposit amount.
  • Interest earned is subject to TDS.
  • Resident Indians, public or private limited company, HUFs, trust and partnership firms can open Reinvestment deposit schemes.

Regular fixed deposit scheme

  • The deposit scheme offers good interest rates enabling the depositors to earn significant returns. Also, it offers great flexibility and liquidity.
  • Minimum deposit amount is INR 1,000 and no maximum limit.
  • The tenure ranges between seven days to ten years.
  • The scheme provides an auto renewal facility for an equal period.
  • Nomination facility is available as well with a regular fixed deposit scheme.
  • Depositors can avail loan against their deposit.
  • Resident Indians, public or private limited company, HUFs, trust and partnership firms can open a regular fixed deposit scheme.

Term deposit scheme

  • Term deposits are repayable after an agreed period fixed at the time of deposit. The interest payment is on the maturity of the deposit along with the principal.
  • Minimum deposit amount is INR 1,000 and in multiples of INR 100, after that. Also, there is no maximum limit.
  • The tenure ranges between seven days to 180 days.
  • Interest is paid along with the principal on maturity. Also, it is subject to TDS.
  • Auto renewal, loan, nomination and pre closure facility available.
  • Resident Individual (sole or joint account), Hindu Undivided Family, public and private limited companies can open term deposit schemes at Indian Bank.

Tax saver term deposit scheme

  • Depositors can claim tax benefit under Section 80C of the Income Tax Act. Deposits up to INR 1,50,000 per year qualify for the benefit.
  • Minimum deposit amount is INR 1,000 and in multiples of INR 100, after that. The maximum amount is INR 1,50,000.
  • The investment tenure is a minimum of five years. Also, the maximum is ten years for Individuals and HUFs with a PAN Card can invest up to INR 1,50,000 in a financial year.
  • No loan or foreclosure facility available for up to five years.
  • Nomination facility is available.
  • Resident individuals (sole or joint account) and Hindu Undivided Family (HUF) can open tax saver term deposits with Indian Bank.

What is the tenure range for Indian Bank Fixed Deposit?

The tenure range for Indian Bank FD is seven days to 10 years. The tenure breakdown is given below:

Tenure
7 days to 14 days
15 days to 29 days
30 days to 45 days
46 days to 90 days
91 days to 180 days
181 days to 269 days
9 months to 364 days
1 year
1 year 1 day to 1 year 364 days
2 years to 2 years 364 days
3 years to 4 years 364 days
5 years to 10 years

What are the documents required to open a Fixed Deposit account in Indian Bank?

One can invest in BOI Fixed Deposit online or offline. The documents required to open a fixed deposit account are:

  • Fixed Deposit application form
  • 2 Passport Size Photographs
  • Pan Card or Form No. 60 or 61 of the Income Tax Act
  • Senior Citizen ID Card (for senior citizens)
  • Identity Proof as per KYC norms. (Aadhar Card, Passport, PAN Card, Driving License, Voter ID Card,)
  • Address proof as per KYC norms. (Aadhar card, Electricity bill, Telephone bill, Bank Statement with cheque)

Any other documents as applicable for company, proprietorship, trust, HUF, partnership, institution etc. 

What is the current interest rate on fixed deposit schemes in Indian Bank?

The current Indian Bank fixed deposits rates for regular citizens are:

  • For a tenure of 7-14 days, it is 2.90%
  • For a tenure of 15-90 days, it is 3.05%
  • A tenure of 91-180 days it is 3.95%
  • For 181-364 days of tenure, it is 4.45%
  • For a tenure of 1 year, it is 5.15%
  • Tenure of 1 year to 2 years 364 days it is 5.25%
  • Any FD with a tenure of 3-10 years is 5.15%

The current Indian Bank fixed deposits rates for senior citizens are:

  • For a tenure of 7-14 days, it is 3.40%
  • For a tenure of 15-90 days, it is 3.55%
  • A tenure of 91-180 days it is 4.45%
  • For 181-364 days of tenure, it is 4.95%
  • For a tenure of 1 year, it is 5.65%
  • Tenure of 1 year to 2 years 364 days it is 5.75%
  • Any FD with a tenure of 3-10 years is 5.65%

To calculate the wealth accumulated from an investment in Indian Bank FD, one can use a fixed deposit calculator. Scripbox’s fixed deposit calculator is free to use and is available online. Alternatively, one can use the Indian Bank FD Calculator to calculate the same.

Is PAN mandatory to open an Indian Bank FD account?

A PAN card or details of PAN isn’t mandatory to open an Indian Bank FD account. Even if the PAN card isn’t mandatory, there are a few implications for the same.

As per the regulations of section 206AA, TDS levied will be 20% instead of the regular 10%

The bank will not issue any TDS certificate to the investor.

All exemption certificates, including Form 15G/H, will be invalid and cannot be used by the investor.

Can I open an FD account without holding a bank account with Indian Bank?

Yes, one can invest in Indian Bank FD without having a bank account. To invest in Indian Bank FD, the individual needs to submit the following documents:

  • Fixed Deposit application form
  • 2 Passport Size Photographs
  • Pan Card or Form No. 60 or 61 of the Income Tax Act
  • Senior Citizen ID Card (for senior citizens)
  • Identity Proof as per KYC norms. (Aadhar Card, Passport, PAN Card, Driving License, Voter ID Card,)
  • Address proof as per KYC norms. (Aadhar card, Electricity bill, Telephone bill, Bank Statement with cheque)

Any other documents as applicable for company, proprietorship, trust, HUF, partnership, institution etc. 

Does Indian Bank offer Recurring Deposits?

Yes, Indian Bank offers recurring deposits to its depositors. Indian Bank recurring deposits have a minimum tenure of 180 days and a maximum tenure of 10 years. Depositors can open an RD account with Indian Bank either by going to the bank branch or online using net banking. Below are the Indian Bank RD interest rates for different tenures.

TenureGeneral RatesSenior Citizen Rates
180 days3.95%4.45%
181 days to 269 days4.45%4.95%
9 months to 364 days4.45%4.95%
1 year5.25%5.75%
1 year 1 day to 1 year 364 days5.15%5.65%
2 years to 2 years 364 days5.15%5.65%
3 years to 10 years5.15%5.65%

Note: Indian Bank revises RD interest rates periodically

Who is eligible for opening a fixed deposit account in Indian Bank?

The eligibility criteria for opening an Indian Bank FD is

  • Resident Indians
  • Public or private limited company
  • HUFs
  • Trusts
  • Partnership firms

Can I take a loan against a fixed deposit?

Indian Bank offers loans against fixed deposit up to 90% of the deposit amount. Indian Bank will give a bank loan against Indian Bank FD only, and the tenure of the bank loan is limited to the tenure of the FD. No loan can be availed against tax saving FDs.

Loans such as an education loan, loan against property (home loan), business loan, etc., can be taken against an FD. One can always calculate their loan EMI using Scripbox’s loan EMI calculator. The loan EMI calculator works as a home loan EMI calculator, personal loan EMI calculator, and car loan EMI calculator. The investor can also use Scripbox’s EMI calculator in multiple scenarios. They can do so by changing the home loan interest rate, personal loan interest rate, and car loan interest rate.

What are the tax implications of fixed deposits?

All investments made in Indian Bank tax saving FDs qualify for tax exemption under Section 80C of the Income Tax Act. The same can be claimed while filing income tax returns. All other Indian Bank FDs do not qualify for tax exemptions. Interest on Indian Bank FD is taxable as per the individual’s income tax slab rates. Furthermore, there is a TDS of 10% on interest income exceeding INR 40,000 (INR 50,000 for senior citizens). If PAN details are not submitted, then the TDS rate will be 20%. To know whether an FD investment is earning above or below the threshold limit, one can use the Indian Bank FD calculator. One can also use Scripbox’s Income Tax Calculator to estimate tax liability. The calculator is available online and is free to use.

Frequently Asked Questions

What is the highest Indian Bank FD rate?

The highest FD rate for Indian Bank is 5.25% for a regular investor for the tenure of 1-2 years. For the same tenure, the senior citizen FD rate is 5.75%. One can calculate the returns from Indian Bank FD schemes using Indian Bank FD calculators.

What is the minimum amount that I have to give for opening a Fixed Deposit with Indian Bank?

The minimum amount required to open an FD with Indian Bank is INR 100. However, Indian Bank has no limit on the maximum investment amount.

Can I deposit an additional amount in my Fixed Deposit account?

No, Indian Bank doesn’t allow investors to deposit any additional amount in an existing fixed deposit. However, one can always invest in another Indian Bank FD with an additional amount.

How can I change the tenure of my existing fixed deposit account with Indian Bank?

One cannot change the tenure of their Indian Bank FD investment. However, one can close the existing Indian Bank FD and start a new FD with the desired tenure. Alternatively, one can opt for premature withdrawal or take a loan against their Indian Bank FD.

Is the penalty changed for early withdrawal?

Yes, Indian Bank charges a penalty for premature withdrawal. For all deposits of INR 5 lakh and above, if the investment is withdrawn before completion of 181 days, then the penalty is 1% on the interest rate. However, if the investment is held for 181 days and the investment amount is below INR 5 lakhs, then there is no penalty for the same.

Published on November 17, 2020