BOI Bank RD Interest Rates

About BOI Recurring Deposit

Bank of India (BOI) RDs are investments that allow investors to save small amounts regularly. The bank has a tenure of 6 months to 10 years, and the interest rates vary with the tenure.

BOI RD rates range between 5% to 6.75% p.a. for regular citizens. For senior citizens, the RD rates range between 5.4% to 7.25% p.a.. One can estimate the returns from their BOI RD investment using the BOI recurring deposit calculator. The RD rates of BOI are higher than their saving account rates. The BOI RD rate of interest differs based on the investor’s age, investment tenure, RBI policies and economic conditions in the country.

The interest income from RD investment is taxable as per investor’s income tax slab rates. Also, this interest income falls under the head ‘Income from Other Sources’ while filing their income tax returns. Moreover, the bank has to deduct a TDS of 10% if the interest income exceeds INR 40,000 while the threshold limit for senior citizens is INR 50,000. Furthermore, this rate is applicable if the investor gives their PAN card details. Else, 20% TDS rate is deducted by the bank. 

BOI Recurring Deposits Features

• Tenure: The BOI recurring deposit tenure ranges between 6 months to 120 months, in multiples of 3 months
• Minimum and Maximum Deposit Amount: The minimum amount of investment in BOI RD is INR 500, and in its multiples thereafter. However, there is no limit on maximum investment.
• Tax and TDS: BOI RDs do not qualify for tax saving. The interest income that one earns from BOI RDs is taxable as per the individual’s respective income tax slab rates. Moreover, BOI deducts a TDS of 10% if the interest income per annum exceeds INR 40,000 (INR 50,000 for senior citizens). The 10% TDS is applicable only when PAN details are submitted; else the bank deducts TDS at 20%.
  One can determine whether BOI RD interest income is above or below the TDS threshold limit using the BOI RD Calculator. Also, investors can calculate their income tax liability using Scripbox’s Income Tax Calculator.
• Premature withdrawal: BOI allows investors to prematurely withdraw their recurring deposits. However, BOI charges a penalty depending on their banking norms.
• Nomination Facility: Depositors can nominate beneficiaries for their BOI RDs.
• Convenience: Opening and managing recurring deposit investments are easy and convenient through BOI’s online portal.

BOI RD Account Eligibility and Documents Required

Eligibility: Following are the eligibility criteria for opening a BOI RD account

• Resident Individuals, including minors
• HUFs

Deposit and account: One can open a BOI recurring deposit account with a minimum investment of INR 500 and in multiples thereafter. However, there is no limit on the maximum investment amount for BOI RD.

Documents Required:

• PAN Card,
• Aadhar Card,
• Driving licence,
• Government ID card,
• Senior Citizen Card
• Utility bills,
• Passport,
• Bank statement with cheque,
• Certificate or ID card issued by the post office

Withdrawal: BOI allows investors to prematurely withdraw their RD investment, however, with a penalty. The bank charges a penalty on the interest rate which varies depending on the banking policies. 

Nomination: BOI RDs have a nomination facility where the account holder can nominate beneficiaries.

Types of BOI Recurring Deposit Schemes

BOI offers the following recurring deposit schemes:

Recurring Deposits

Recurring Deposit is a type of deposit account that enables investors to save a fixed amount every month over a tenure. The deposits in this type of account earn interest which is compounded on a quarterly basis. Also, if the tenures are longer the interest rates can be higher subject to the banking rules. 

• Tenure: 6 months – 120 months (in multiples of 3 months)
• Minimum Deposit Amount: INR 500, and in multiples thereafter.
• Maximum Deposit Amount: No limit
• Tax Deducted at Source: Applicable
• Nomination Facility: Available
• Premature closure: Available, however, with a penalty depending on banking norms. 
• Penalty for late deposits: If the instalment is delayed beyond the calendar date, then banks charge a penalty of INR 1.50 for every INR 100 for deposits less than 5 years or more and INR 2 for every INR 100 for deposits more than 5 years.

Star Flexi Recurring Deposits

Star Flexi Recurring Deposit scheme is a unique RD which offers flexibility to the customer to choose core instalments and to also choose monthly Flexi instalments in multiples of the core instalment.

The core instalment has a fixed rate which is decided at the time of account opening. While the flexible instalments will have the applicable rate at the time of deposit. 

• Tenure: 12 months – 120 months (in multiples of 3 months)
• Minimum Core Instalment: INR 500, and in multiples thereafter.
• Amount of Monthly Instalment: No Limit
• Flexi Instalment: Any amount in multiples of core monthly instalments opted while account opening. Also, the maximum Flexi instalment can be any number of times the core monthly instalment.
• Tax Deducted at Source: Applicable
• Nomination Facility: Available
• Premature closure: Available, however, with a penalty depending on banking norms. 
• Penalty for late deposits:  If the instalment is delayed beyond the calendar date, then banks charge a penalty of INR 1.50 for every INR 100 for deposits less than 5 years or more and INR 2 for every INR 100 for deposits more than 5 years.

Can I open a recurring deposit account for a minor in BOI?

Yes, one can open a BOI RD account on behalf of a minor.

Is it possible to renew an RD account in BOI?

Yes, it is possible to renew a BOI RD account. However, renewal is possible as per BOI norms and rules.

Conclusion

BOI RDs are considered a good investment for investors who can save small amounts of money regularly. Also, RD schemes are considered low-risk investments as they offer investors guaranteed returns. However, investors remember the tax consideration as they have to pay taxes on interest earned on BOI RD investments. Therefore, investors looking for fixed returns and understanding the taxes on interest income can consider investing in this scheme.

Resources

1. BOI Mutual Funds
2. BOI SIP Calculator
3. BOI Fixed Deposit
4. BOI FD Calculator
5. BOI PPF Calculator