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Kotak Bank Interest Rates: Features, Types, and Loan

kotak fd rates
kotak fd rates

Introduction

Kotak Bank offers FDs across maturity periods with varying interest rates. The fixed deposit offerings of Kotak Bank are across domestic, NRE and NRO accounts. The Kotak Mahindra Bank FD rates are higher than the rates on savings accounts. One can open an FD account both online and offline. Kotak also offers loan facility on FD. One can get up to 85% on the FD value as a loan. There is also a premature withdrawal facility for FDs with a penalty of 0.5%. This is only levied if the investment period exceeds 181 days.

Kotak Bank FD Interest Rates 2020

Kotak Mahindra Banks FD rates are given below.

TenureFixed Deposit Interest RatesSenior Citizen Fixed Deposit Interest Rates
7 days to 14 days2.75%3.25%
15 days to 30 days3.00%3.50%
31 days to 45 days3.00%3.50%
46 days to 90 days3.50%4.00%
91 days to 120 days4.10%4.50%
121 days to 179 days4.10%4.60%
180 days4.75%5.25%
181 days to 269 days4.75%5.25%
270 days4.75%5.25%
271 days to 363 days4.75%5.25%
364 days4.75%5.25%
365 days to 389 days4.75%5.25%
390 days5.25%5.75%
391 days to 22 months 29 days5.25%5.75%
23 months5.25%5.75%
23 months 1 day to 1 year 11 months 29 days5.15%5.65%
2 years to 2 years 364 days4.90%5.40%
3 years to 3 years 364 days4.90%5.40%
4 years to 4 years 364 days4.75%5.25%
5 years to 10 years4.50%5.00%

Note: Kotak Bank revises fixed deposit rates periodically 

The interest for Kotak Mahindra Banks fixed deposit is calculated quarterly. The interest payment for the deposited amount is made at regular intervals or at maturity as per the investor’s choice. Any investment made in Tax Saving FDs of Kotak Bank qualifies for tax saving under section 80C of the Income Tax Act. Other than that, any investment made in Kotak FDs is not eligible for tax savings. A TDS of 10% is cut on interest if the interest income per annum is above INR 40,000 (INR 50,000 for senior citizens). Furthermore, if the investor doesn’t provide PAN details, the TDS would be 20% for interest above INR 40,000 (INR 50,000 for senior citizens). Also, the interest income is taxable at the rate of an individual’s income tax slabs.

Key Features of Kotak Bank Fixed Deposit

The features of Kotak Fixed Deposit are:

  • Tenure: The FD tenure ranges between 7 days to 10 years
  • Minimum Amount: The minimum amount to open an FD with Kotak Bank is INR 10,000.
  • Maximum Amount: There is no maximum limit
  • Senior Citizens FD Rate: Kotak offers a higher interest rate of 0.25% to 0.50% for senior citizens.
  • Safety: The Deposit Insurance Scheme covers the deposits made with Kotak Bank. DICGC insures deposits up to INR 5,00,000.
  • Loan against FD: Depositors can avail loan on their Kotak Bank FDs. This is to help the depositors to meet their financial requirements without having to break the FD.
  • Overdraft: Overdraft facility up to 85% of the deposit amount is available.
  • Nomination Facility: The Bank allows depositors to nominate beneficiaries.
  • Auto Renewal: The Kotak bank provides auto renewal facility.
  • Premature Withdrawal: The bank allows premature withdrawals. The option is to avoid breaking the FD.
  • Sweep-in Facility: The facility provides the option of linking FD account to current account or savings account. Any deficits in the linked accounts will be recuperated with FD to maintain a minimum balance.
  • Convenience: Depositors can easily open fixed deposits with Kotak Bank either online or by visiting the nearest bank branch.

Types of Fixed Deposits FD offered by Kotak Bank

  • Regular Fixed Deposit
  • Tax Saving Fixed Deposit
  • Senior Citizen Fixed Deposit
  • Ace Fixed Deposit

Types of Fixed Deposits: In Detail

Regular Fixed Deposit

  • The regular fixed deposit account helps the depositor to earn higher returns when compared to holding the cash idle in the savings account.
  • Maturity periods for these FD schemes range between 7 days and ten years.
  • These FD schemes provide a sweep-in facility to maintain liquidity.
  • These FD schemes also permit premature closure of the account and partial withdrawals.
  • Also, the regular fixed deposit savings scheme provides an overdraft facility.
  • The deposit can opt for either cumulative or non-cumulative (monthly or quarterly) interest payments.
  • Resident Indian citizens, sole proprietorship firms, and HUFs can open a regular fixed deposit account.

Tax Saving Fixed Deposit

  • Kotak Mahindra Tax Saving Fixed Deposit scheme investments quality for a tax deduction. Under Section 80 C of the Income Tax Act, depositors can claim a tax deduction for investments up to INR 1.5 lakhs.
  • The fixed deposit scheme has a lock-in period of 5 years. Hence, the scheme doesn’t allow premature withdrawals.
  • The minimum deposit for this Kotak FD is INR 100.
  • Depositors cannot avail loan against deposits made in a Tax Saving FD account.
  • One can choose to receive interest every quarter or get it compounded till maturity.
  • The tax saving FD is available for senior citizens as well.
  • Resident Indian citizens, minors, senior citizens, and HUFs can open tax saving fixed deposit accounts.

Senior Citizen Fixed Deposit

  • The Senior Citizen FD is specially designed for senior citizens of society.
  • This Kotak FD offers preferential interest rates to senior citizen depositors.
  • The tenure of the deposit account varies between 7 days to 10 years.
  • Minimum deposit amount is INR 5,000.
  • The savings scheme permits premature withdrawals and partial withdrawals.
  • Depositors can opt to receive interest monthly, quarterly or get it compounded till maturity.

FD account opening process

Kotak Bank FD can be opened online and offline. One can invest in Kotak Mahindra FD offline by visiting the nearest branch of Kotak Bank. The investors have to fill the FD application form with details like the type of FD, tenure, interest payouts frequency. Along with the application form, one has to submit necessary documents.

The online procedure is the same as offline, but instead of visiting the branch, one has to go to the Kotak bank’s website.

The documents required to open an FD in Kotak Bank are:

  • FD account opening form
  • 4 passport size photographs
  • Identity Proof as per KYC norms. (PAN Card, Aadhaar Card, Voter ID Card, Passport, Driving License)
  • Address proof as per KYC norms. (PAN Card, Aadhaar Card, Voter ID Card, Passport, Driving License)
  • Signature proof (PAN Card, Passport, Driving License)
  • Pan Card or a declaration in Form No. 60 or 61 of the Income Tax Act
  • Senior Citizen ID Card (for senior citizens)
  • Any other documents as applicable for partnership, proprietorship, company, HUF, association or institution.

Also, only eligible investors can invest in Kotak Bank FD. The eligibility criteria to invest in Kotak Bank FD is:

  • Indian National
  • NRIs and PIOs (Non-Resident Indians and Persons of Indian Origin)
  • HUFs
  • Senior Citizens and Minors

Loan against FD account

Kotak Bank provides a loan against FD and gets 85% of the loan value. The tenure of the loans is from 7 days to 7 years. These loans are usually quickly approved with minimum documentation. The FD will continue to earn interest even during the tenure of the loan. This enables the investors to earn interest on FD and at the same time use the FD as collateral for the loan.

Loans such as loan against property (home loan), business loan, an education loan, etc., can be taken against an FD. The loan interest rate varies based on the bank and type of loan. One can always calculate their loan EMI using the loan EMI calculator. The loan EMI calculator works as a home loan calculator, personal loan EMI calculator and car loan calculator. The investor can also use this EMI calculator in multiple scenarios by changing the car loan interest rate, personal loan interest rate, and home loan interest rate. 

Premature withdrawal

Kotak Bank allows investors to withdraw their FD investment prematurely. Investors can opt for the premature withdrawal, but they will have to pay the penalty for the same. Any FD which is held for less than 181 days, need not pay any penalty for withdrawing their FD.

However, if the FD is held with the bank for more than 181 days, then a penalty of 0.50% is charged. The investors will earn 0.5% less on their FD interest rate.

What is the tenure range for Kotak Bank Fixed Deposit?

The tenure range for Kotak fixed deposit is seven days to 10 years. The tenure breakdown is given below:

Tenure
7 days to 14 days
15 days to 30 days
31 days to 45 days
46 days to 90 days
91 days to 120 days
121 days to 179 days
180 days
181 days to 269 days
270 days
271 days to 363 days
364 days
365 days to 389 days
390 days
391 days to 22 months 29 days
23 months
23 months 1 day to 1 year 11 months 29 days
2 years to 2 years 364 days
3 years to 3 years 364 days
4 years to 4 years 364 days
5 years to 10 years

Who is eligible for opening an FD account in Kotak Bank?

Also, only eligible investors can invest in Kotak Bank FD. The eligibility criteria to invest in Kotak Bank FD is:

  • Indian National
  • NRIs and PIOs (Non Resident Indians and Persons of Indian Origin)
  • HUFs
  • Senior Citizens and Minors

What are the documents required to open an FD account in Kotak Bank?

The documents required to open an FD in Kotak Bank are:

  • FD account opening form
  • 4 passport size photographs
  • Identity Proof as per KYC norms. (PAN Card, Aadhar Card, Voter ID Card, Passport, Driving License)
  • Address proof as per KYC norms. (PAN Card, Aadhar Card, Voter ID Card, Passport, Driving License)
  • Signature proof (PAN Card, Passport, Driving License)
  • Pan Card or a declaration in Form No. 60 or 61 of the Income Tax Act
  • Senior Citizen ID Card (for senior citizens)
  • Any other documents as applicable for partnership, proprietorship, company, HUF, association or institution.

What is the current interest rate on FD in Kotak Bank?

The Kotak Mahindra Bank FD rates are higher than the rates on savings accounts. The interest for Kotak Mahindra Banks fixed deposit is calculated quarterly. The interest payment for the deposited amount is made at regular intervals or at maturity as per the investor’s choice. Also, the interest income is taxable at the rate of an individual’s income tax slabs.

The current fixed deposit rates of Kotak Bank are:

Kotak Bank FD rates for regular citizens:

  • For a tenure of 7-14 days, it is 2.75%
  • A tenure of 15-45 days it is 3%
  • For 46-90 days it is 3.5%
  • For 91-179 days tenure, it is 4.10%
  • The FD rate for 180-389 days is 4.75%
  • For 390 days to 23 months, it is 5.25%
  • For 23 months 1 day to 1 year 11 months 29 days it is 5.15%
  • 2 years to 3 years 364 days it is 4.9%
  • 4 years to 4 years 364 days 4.75%
  • Any FD with a tenure of 5-10 years is 4.50%

Kotak Bank FD rates for senior citizens:

  • For a tenure of 7-14 days, it is 3.25%
  • A tenure of 15-45 days it is 3.5%
  • For 46-90 days it is 4%
  • For 91-120 days tenure, it is 4.50%
  • 121 days-176 days 4.6%
  • The FD rate for 180-389 days is 5.25%
  • For 390 days to 23 months, it is 5.75%
  • For 23 months 1 day to 1 year 11 months 29 days it is 5.65%
  • 2 years to 3 years 364 days it is 5.40%
  • 4 years to 4 years 364 days 5.25%
  • Any FD with a tenure of 5-10 years is 5%

To calculate the maturity amount of an FD investment, one can use a fixed deposit calculator. Scripbox’s fixed deposit calculator is available online and is free to use.

Is PAN mandatory to open a Kotak Bank FD account?

A PAN card isn’t mandatory to open a Kotak Bank FD account. However, there are a few implications for the same.

  • Under section 206AA, TDS will be deducted at the rate of 20% instead of the regular 10%
  • The bank will not issue any TDS certificate.
  • Form 15G/H and other exemption certificates will be invalid and penal TDS will apply.

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

Yes, one can open an FD in Kotak Bank without having a saving or current account in Kotak. The individual has to submit the following documents for the same.

  • FD account opening form
  • 4 passport size photographs
  • Identity Proof as per KYC norms. (PAN Card, Aadhar Card, Voter ID Card, Passport, Driving License)
  • Address proof as per KYC norms. (PAN Card, Aadhar Card, Voter ID Card, Passport, Driving License)
  • Signature proof (PAN Card, Passport, Driving License)
  • Pan Card or a declaration in Form No. 60 or 61 of the Income Tax Act
  • Senior Citizen ID Card (for senior citizens)
  • Any other documents as applicable for partnership, proprietorship, company, HUF, association or institution.

Is the penalty changed for early withdrawal?

Kotak Bank allows investors to withdraw their FD investment prematurely. Investors can opt for the premature withdrawal, but they will have to pay the penalty for the same. Any FD which is held for less than 181 days, need not pay any penalty for withdrawing their FD.

However, if the FD is held with the bank for more than 181 days, then a penalty of 0.50% is charged. The investors will earn 0.5% less on their FD interest rate.

Can I take a loan against fixed deposit?

Kotak Bank provides a loan against FD and gets 85% of the loan value. The tenure of the loans is from 7 days to 7 years. These loans are usually quickly approved with minimum documentation. The FD will continue to earn interest even during the tenure of the loan. This enables the investors to earn interest on FD and at the same time use the FD as collateral for the loan.

Loans such as loan against property (home loan), business loan, an education loan, etc., can be taken against an FD. The loan interest rate varies based on the bank and type of loan. One can always calculate their loan EMI using the loan EMI calculator. The loan EMI calculator works as a home loan calculator, personal loan EMI calculator and car loan calculator. The investor can also use this EMI calculator in multiple scenarios by changing the car loan interest rate, personal loan interest rate, and home loan interest rate. 

What are the tax implications of fixed deposits?

5-year tax saving FDs and FCNR FDs (NRI FD) are the only two FDs whose investment qualifies for tax exemption. However, all the FDs are subject to TDS of 10%. TDS is charged only if the interest earned is above INR 40,000 and (INR 50,000 for senior citizens).  To know the interest earned is above or below the TDS threshold limit, one can use multiple bank FD calculators available online.

One can use the Income Tax Calculator to calculate their tax liability. Scripbox’s Income Tax Calculator is online and free to use.

Does Kotak Bank offer Recurring Deposits?

Yes, Kotak Bank offers recurring deposits for its depositors. The recurring deposits have a minimum tenure of 3 months and in multiples of three months until the maximum tenure. The maximum tenure of the recurring deposit is ten years. Depositors can open an RD account either by going to the bank branch or online using net banking. Below are the Kotak Bank RD interest rates for different tenures.

TenureKotak Bank RD Interest RatesKotak Bank Senior Citizen Interest Rates
6 Months4.70%5.20%
9 Months4.70%5.20%
12 Months4.75%5.25%
15 Months5.15%5.65%
18 Months5.15%5.65%
21 Months5.15%5.65%
24 Months4.90%5.40%
27 Months4.90%5.40%
30 Months4.90%5.40%
33 Months4.90%5.40%
3 years – less than 4 years4.90%x5.40%
4 years – less than 5 years4.75%5.25%
5 years – 10years4.50%5.00%

Note: Kotak Bank revises RD interest rates periodically

What is the average interest rate of FDs across Indian Banks?

The average interest rate of FDs across Indian Banks is around 5%. The average is calculated only for banks. The post office fixed deposit is not considered for the same. The interest for the post office fixed deposit is 6.7%

Published on July 29, 2020