9 Mins

Introduction

Union Bank of India RDs allows investors to invest in small amounts regularly for a fixed tenure. The Union Bank of India recurring deposit rate ranges between 5.5% to 5.9% for both regular citizens and senior citizens. Moreover, Union Bank of India doesn’t charge any penalty for premature withdrawals and delayed payments. This article covers Union Bank of India RDs and its interest rates in detail.

Union Bank of India Recurring Deposits

Following are the key features of Union Bank of India recurring deposits:

Tenure

The Union Bank of India recurring deposit tenure ranges between 6 months to 120 months.

Minimum and Maximum Deposit Amount

The minimum amount of investment in Union Bank of India RD is INR 100. Also, there is no limit on the maximum deposit amount.

Union Bank of India Recurring Deposit Rate

Union Bank of India RD interest rates is in the range of 5.50%-5.90% for regular as well as senior citizens. Furthermore, one can calculate potential returns from Union Bank of India recurring deposits using the recurring deposit calculator.

Tax and TDS

Union Bank of India RD schemes does not qualify for tax saving. Also, the interest income from Union Bank of India RDs is taxable as per investor’s income tax slab rates. Moreover, Union Bank of India 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 when the PAN card details are submitted, else the bank charges TDS at 20%.

Also, one can determine whether the Union Bank of India RD interest income is above or below the TDS threshold limit using the RD calculator. Furthermore, one can estimate their income tax liability with the help of Scripbox’s Income Tax Calculator.

Premature withdrawal

Union Bank of India allows investors to prematurely withdrawal their recurring deposits without any penalty.

Nomination Facility

Depositors can nominate beneficiaries for their Union Bank of India RDs.

Convenience

The Union Bank of India’s online portal makes it easy to manage RD investments. Hence opening and managing the recurring deposit investments is easy and convenient.

Loan against RD

Union Bank of India allows investors to take a loan against recurring deposits. Hence, this enables the depositors to meet their financial liquidity requirements. Furthermore, it eliminated the hassle of applying for a new loan.

Investors can take loans such as home loan (loan against property), motor loans, education loans, personal loans, etc., against Union Bank of India RD. Also, individuals can compute loan EMI using the loan EMI calculator. Furthermore, the loan EMI calculator works as a car loan calculator, home loan calculator, and also personal loan EMI calculator. Moreover, one can use the EMI calculator for comparing various scenarios by changing the variables such as interest rate.

Union Bank of India RD Recurring Deposit Interest Rates

Following are the Union Bank of India RD interest rates

Union Bank of India RDs has interest rates that range between 5.5% to 5.9% for a tenure of 6 months to 10 years. For senior citizens, the interest rates also range between 5.5% to 5.9%. Also, Union Bank of India pays interest on a quarterly basis. Moreover, one can estimate the returns from Union Bank RDs using a Union Bank of India recurring deposit calculator. Furthermore, the interest rates of Union Bank of India RDs are dependent on the age of the investor, tenure of the investment, RBI policies and current economic condition in the country.

Also, interest income from Union Bank of India RDs is taxable as per the individual investor’s income tax slab rates. Investors have to file the interest income under the head ‘Income from other Sources’ while filing their income tax returns. Moreover, Union Bank of India deducts a TDS of 10% if the interest income exceeds INR 40,000 (INR 50,000 for senior citizens). Also, Union Bank cuts 20% if the investor doesn’t submit PAN Card details.

TenureGeneral RD RatesSenior Citizen RD Rates
180 days to 364 days5.50%5.50%
1 year to 554 days5.75%5.75%
444 days5.85%5.85%
555 days5.90%5.90%
556 days to 2 years 12 months 31 days5.75%5.75%
3 years to 10 years5.80%5.80%
Note: Union Bank of India RD interest rates are subject to change

Requirements of Union Bank of India RD Scheme

Eligibility

To be able to invest in the Union Bank of India RD scheme, one has to be eligible. Following is the eligibility criteria for opening a Union Bank of India RD account:

  • Individuals, including minors, and joint accounts
  • Illiterates and blind people
  • Cooperation
  • Trusts
  • HUF
  • Companies
  • Partnership firms

Deposit and account

One can invest in Union Bank of India RD with an amount as low as INR 100. And the bank doesn’t charge any penalties for delayed payments of instalments.

Documents

Following are the documents required for opening a Union Bank of India RD account:

  • ID proof – Any Government ID including, Voter ID, Driving License, Aadhar Card, and PAN Card
  • Address proof – Passport, Aadhar Card, Utility Bills, Driving License, and Bank statement with a cheque.

Withdrawal

Union Bank of India allows investors to prematurely withdraw their RD investments without charging any penalty and hence investors are free to withdraw their investments anytime.

Tax

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

Also, the interest income is subject to TDS. The Union of India Bank cuts TDS based on whether the investor has disclosed the PAN details or not.

If the investor submits the PAN Card details to Union Bank of India, then the applicable TDS rate is10%. Then, Union Bank of India cuts TDS if the interest income exceeds INR 40,000 for regular citizens and INR 50,000 for senior citizens.

If the investor doesn’t submit the PAN Card details, then the applicable TDS rate is 20%. Then, Union Bank of India cuts TDS if the interest income exceeds INR 40,000 for regular citizens and INR 50,000 for senior citizens.

Nomination

Union Bank of India allows investors to nominate beneficiaries for their Union Bank of India RD investments.

Types of Deposit Schemes

Union Bank of India offers the following recurring deposit schemes:

Cumulative Deposit Scheme

The cumulative deposit scheme allows small investors to save through easy monthly instalments over a fixed duration.

  • Tenure: 6 months to 10 years (in multiples of 1 month)
  • Minimum Deposit Amount: INR 50
  • Maximum Deposit Amount: No limit.
  • Nomination Facility: Available
  • Tax Deducted at Source: Applicable
  • Loan Facility: Available
  • Auto Renewal: Not allowed
  • Premature closure: Available, however, attracts penalty if any.
  • Penalty for late instalment: No penalty for delayed or non-deposit of monthly instalments.

Union Monthly Plus

The scheme is a flexible deposit scheme with a step up and step down options with monthly instalments. The depositors have to declare a ‘core amount’ while opening the account and deposit the same as initial instalment. Furthermore, one can deposit multiple times in a month. Also, the maximum permissible amount per month is 10 times the core amount or INR 1,00,000 whichever is lower.

Step Up Option: Depositors can increase or step up their monthly instalment amount up to 10 times of the core amount. For example, if the core amount is INR 500, the depositor can deposit a maximum of INR 5,000 per month.

Step Down Option: On stepping up the monthly instalments, one can also reduce or step down the same in any of the subsequent months. However, the monthly instalment amount cannot be less than the core amount.

  • Tenure: 6 months to 60 months (in multiples of 1 month)
  • Minimum Core Amount: INR 100 and in multiples of it thereafter
  • Maximum Core Amount: INR 1,00,000
  • Maximum Deposit Amount per month: 10 times the core amount or INR 1,00,000, whichever is lower.
  • Nomination Facility: Available
  • Tax Deducted at Source: Applicable
  • Loan Facility: Available
  • Auto Renewal: Not allowed
  • Premature closure: Available, however, attracts penalty if any.
  • Penalty for late instalment: No penalty for delayed or non-deposit of monthly instalments.

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

Union Bank of India offers varying interest rates for RDs and FDs and following are Union Bank of India recurring deposit interest rates:

TenureGeneral RatesSenior Citizen Rates
180 days to 364 days5.50%5.50%
1 year5.75%5.75%
1 yr 1 day to 443 days5.75%5.75%
445 days to 554 days5.75%5.75%
444 days5.85%5.85%
555 days5.90%5.90%
556 days to 2 years 12 months 31 days5.75%5.75%
3 years to 10 years5.80%5.80%

Following are the Union Bank of India fixed deposit interest rates:

TenureFixed Deposit FD Interest RatesSenior Citizen FD Interest Rates
7 days to 14 days3.00%3.50%
15 days to 30 days3.00%3.50%
31 days to 45 days3.00%3.50%
46 days to 90 days3.75%4.25%
91 days to 120 days4.25%4.75%
121 days to 180 days4.30%4.80%
181 days to 364 days4.50%5.00%
1 year5.25%5.75%
1 year 1 day to 2 years5.30%5.80%
2 years 1 day to 3 years5.50%6.00%
3 yrs 1 day to 5 years5.55%6.05%
5 yrs 1 day to 10 years5.60%6.10%

Conclusion

Union Bank of India RD investments require small regular investments. Hence investors who want to save regularly can invest in this scheme. Moreover, Union Bank of India RDs guarantee returns. Hence, they are considered a low-risk investment. However, the interest income from Union Bank of India RDs is taxable as per investor’s income tax slab rate. Therefore, they have to consider the taxes before investing in this scheme.

Frequently Asked Questions

What are the limits on the minimum and maximum deposits?

Union Bank of India recurring deposit accounts require a minimum deposit amount of INR 100 per month, and in its multiples thereafter. With no maximum limit on the deposit amount. For the Union Monthly Plus scheme, the minimum core amount is INR 100 and in multiples of it thereafter, and the maximum core amount is INR 1,00,000. Furthermore, the maximum deposit amount per month is 10 times the core amount or INR 1,00,000 whichever is lower.

Can I open a recurring deposit account for a minor?

Yes, a minor can open a Union Bank of India RD account. However, under the guardianship of their natural guardian (parents) or legal guardian.

How to apply for Union Bank of India RD?

One can open a Union Bank recurring deposit account through both offline and online modes. Firstly, for online mode, one has to visit the Union Bank of India website. While, for offline mode, one has to visit the nearest branch of Union Bank of India.
To be able to invest in Union Bank recurring deposit, one needs to have all valid documents. Firstly, for identity proof, one needs to have any Government ID including, voter ID, driving license, Aadhar card, and PAN card. Lastly, one needs to have address proof. Hence for that, they would need one needs to have a passport, Aadhar card, utility bills, driving license, and bank statement with a cheque.

Is it possible to renew an RD account?

No, it is not possible to automatically renew a Union Bank of India RD account.