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Karnataka Bank offers a range of FD schemes with varying interest rates to its customers. Moreover, one can invest in a Karnataka Bank FD with an amount as low as INR 100. The bank also allows premature withdrawal facility without any penalty for deposits below INR 2 crore. In this article, we have covered about Karnataka Bank FD rates in detail.

Karnataka Bank FD Rates 2021

Following table shows the interest rates of Karnataka Bank FDs for different tenures.

Karnataka Bank fixed deposit interest rates range between 3.4%-5.7% for regular citizens for a tenure of 7 days to 10 years. Moreover, the interest rates for senior citizens range between 3.8% -6.95%. The FD rates of Karnataka Bank are higher than their saving account rates. Moreover, the senior citizens FD rate is higher than the regular citizens rate by 0.4%. Also, as per investor’s choice, the interest payments are done quarterly, half-yearly or annually.

The highest Karnataka Bank FD rate is 5.70% for a regular investor for the tenure of 5-10 years. Also, for a tenure of 2-5 years, the highest senior citizen FD rate is 6.95%. Moreover, returns from Karnataka Bank fixed deposits can be calculated using the Karnataka Bank fixed deposit calculator.

TenureRegular Fixed Deposit RatesSenior Citizen Fixed Deposit Rates
7 days to 45 days3.40%3.80%
46 days to 90 days4.90%5.30%
91 days to 180 days5.20%5.60%
181 days to 364 days5.20%5.60%
1 year to 2 years5.30%5.70%
2 years 1 day to 5 years5.55%6.95%
5 years 1 day to 10 years5.70%6.10%
Note: Karnataka Bank FD rates are revised regularly

Key Features of Karnataka Bank Fixed Deposit

Karnataka Bank fixed deposit schemes offer better returns than a savings bank account. Following are the key features of Karnataka Bank fixed deposits:

Tenure

The Karnataka Bank fixed deposit tenure ranges between 7 days to 10 years. Once invested, one cannot change the tenure of Karnataka Bank FD investment. However, they can opt for premature withdrawal. Also, investors can close the existing Karnataka Bank FD and start a new FD with the desired tenure.

Minimum and Maximum Deposit Amount

The minimum amount of investment for Karnataka Bank FDs is INR 100. Also, there is no limit on the maximum deposit amount of investment. However, for tax saving FDs, the maximum amount of investment is limited to INR 1.5 lakhs per annum.

Karnataka Bank Fixed Deposit Rate 

Karnataka Bank fixed deposit rate ranges between 3.4%-5.7% for regular citizens for a tenure of 7 days to 10 years. Moreover, returns from Karnataka Bank fixed deposits can be calculated using the Karnataka Bank fixed deposit calculator.

Preferential Interest Rates

Karnataka Bank offers preferential rates for senior citizens. Hence, senior citizens get an additional interest of 0.4% on their FDs.

Eligibility

To open a fixed deposit account with Karnataka Bank, one needs to be eligible. Following is the eligibility criteria.

  • Indian residents
  • HUFs
  • Sole proprietorship
  • Partnership firms
  • Limited companies
  • Government units

Documents required

To open an FD account with Karnataka Bank, one would need the following documents.

  • FD application form
  • Government approved identity proof (PAN Card, Aadhar Card, Driving License, Voter ID, Passport)
  • Government approved address proof (Aadhar Card, Voter ID, Electricity Bill, Telephone Bill)
  • PAN Card
  • Aadhar Card

Additional Payments

It is not possible to deposit any additional amount in an existing Karnataka Bank fixed deposit. However, one can always invest in a fresh Karnataka Bank FD with an additional amount.

Tax and TDS

Investment in Karnataka Bank Tax Saving Fixed Deposit qualifies for tax saving under Section 80C of the Income Tax Act, 1961. Investors can claim tax benefits while filing their income tax returns. Also, all other Karnataka Bank FDs do not qualify for tax saving.

The interest income on Karnataka Bank FD investments is taxable as per the investor’s income tax slab rates. Furthermore, if the interest income exceeds INR 40,000 (INR 50,000 for senior citizens) the bank cuts TDS of 10% (20% of PAN Card details are submitted).

One can determine whether their interest income is above or below the TDS threshold limit using Karnataka bank fixed deposit calculator available online. Also, they can estimate their tax liability using an income tax calculator. Scripbox’s income tax calculator is available online and is free to use.

Safety

Under the Deposit Insurance Scheme of RBI, DICGC insures all Karnataka Bank deposits up to INR 5,00,000.

Premature withdrawal

Karnataka Bank allows premature withdrawal of their fixed deposits. For deposits below INR 2 crore, the bank will not charge any penalty. Also, if the deposits above INR 2 crore opt for premature withdrawal, the bank levies 1% interest as penalty on the contracted rate. Also, the bank doesn’t allow premature withdrawal on tax saving deposits.

Nomination Facility

Depositors can nominate beneficiaries for their Karnataka Bank FDs.

Auto-Renewal

Karnataka Bank offers an auto-renewal facility to depositors for their FDs.

Convenience

Opening and managing Karnataka Bank term deposit investments are easy and convenient through their online portal.

Loan against FD and Overdraft

Karnataka Bank allows investors to take a loan against their FDs. This will also help them in meeting their liquidity requirements without breaking their existing FDs. Moreover, the loans will be given as per the guidelines of the bank. Also, they are subject to change from time to time.

Karnataka Bank term deposit investors can take loans such as loan against property (home loan), business loans, education loans, etc., against FD. They can calculate the loan EMI using the loan EMI calculator. Moreover, the loan EMI calculator works as a personal loan EMI calculator, a home loan calculator and car loan calculator. The investor can also use the EMI calculator in multiple scenarios by changing the variables like personal loan interest rate, home loan interest rate and car loan interest rate.

Pan Card

Details of PAN Card are necessary to open an FD account with Karnataka Bank. However, this is only applicable for tax saving FDs. Also, investors investing in other FDs have the option not to disclose their PAN Card details. However, this has its own consequences. Karnataka Bank will deduct TDS at 20% instead of 10% as per section 206AA. Also, the bank will not issue a TDS certificate. Moreover, all exemption certificates, including Form 15G/15H, will be invalid.

Requirement of savings account

Individuals need not have a Karnataka Bank account to open a fixed deposit account.

Types of Fixed Deposit Schemes offered by Karnataka Bank

  • Fixed Deposit
  • Abhyudaya Cash Certificate
  • Tax Planner
  • Soulabhya Deposit

Types of Fixed Deposit Schemes: In Detail

Fixed Deposit

The Karnataka Bank’s fixed deposit scheme is suitable for individuals who wish to have periodical income (interest income).

  • Tenure: 7 days to 120 months
  • Minimum Deposit Amount: INR 100
  • Maximum Deposit Amount: No limit
  • Interest Payout: Depositors can choose interest payout frequency quarterly, half yearly or yearly.
  • Loan Facility: Available; however, bank rules are applicable.
  • Premature payment: Available; however, bank rules are applicable.
  • Nomination Facility: Available

Abhyudaya Cash Certificate

The Abhyudaya Cash Certificate scheme is ideal for depositors who seek lump sum amount after a particular period and who do not need periodic interest. Under this scheme, the quarterly interest is invested back into the scheme.

  • Tenure: 6 months to 120 months
  • Minimum Deposit Amount: INR 100, and in multiples of INR 100 thereafter.
  • Maximum Deposit Amount: No limit
  • Loan Facility: Available; however, bank rules are applicable.
  • Premature payment: Available; however, bank rules are applicable.
  • Nomination Facility: Available

Tax Planner

The Tax Planner scheme is a combination of investment and tax saving. The scheme offers a tax benefit for the deposits under Section 80C of the Income Tax Act. INR 1,50,000 is the threshold per annum to claim the tax benefit. Also, the scheme is available in both Fixed Deposit and Abhyudaya Cash Certificate schemes.

  • Lock-in period: 5 years
  • Minimum Deposit Amount: INR 100, and in multiples of INR 100 thereafter.
  • Maximum Deposit Amount: INR 1,50,000 per annum
  • Loan Facility: Not available
  • Premature payment: Not available
  • Nomination Facility: Available

Soulabhya Deposit

This is a ‘Twin Gain’ scheme. It offers easy withdrawal of money, and the balance amount earns interest at the contracted rate. The scheme offers two options, and the option selected at the time of deposit is irrevocable. Depositors can choose an option to maintain deposit for 46/30 days or choose a tenure between three months and five years.

  • Minimum Deposit Amount: INR 5,000, and in multiples of INR 1,000 thereafter.
  • Loan Facility: Available; however, bank rules are applicable.
  • Nomination Facility: Available

Does Karnataka Bank offer Recurring Deposits?

Yes, Karnataka Bank offers recurring deposit schemes. Moreover, under the scheme, the account holder has to regularly invest a fixed sum of money by way of monthly instalments.

  • Minimum Deposit Tenure: 6 months and in multiples of 3 months.
  • Maximum Deposit Tenure: 120 months
  • Minimum Deposit Amount: INR 50 and in multiples of INR 50 thereafter.
PeriodGeneral RatesSenior Citizen Rates
181 days to less than a year5.70%6.10%
1 year to 2 years5.90%6.30%
2 years 1 day to 5 years5.80%6.20%
5 years 1 day to 10 years5.80%6.20%
Note: Karnataka Bank revises RD interest rates periodically