Canara Bank RD Interest Rates

About Canara Bank Recurring Deposit

Canara Bank RDs are investments that allow investors to save small amounts regularly. They have a tenure of 6 months to 10 years, and the interest rates vary with the tenure. This article covers Canara Bank RD investments and its interest rates in detail.

Canara Bank RD rates range between 5.50% to 6.75% p.a. for regular citizens. For senior citizens, the RD rates range between 6.05% to 7.25% p.a.. One can estimate the returns from their RD investment using a recurring deposit calculator. The RD rates of Canara Bank are higher than their saving account rates. The RD interest rates differ based on the age of the investor, tenure of the investment, RBI policies and economic conditions in the country.

Interest on RDs is taxable as per the individual investor’s income tax slab rates. Investors have to show it under the head ‘Income from Other Sources’ while filing their income tax returns. Moreover, the bank deducts a TDS of 10% if the interest income exceeds INR 40,000 for regular citizens. For senior citizens, the TDS threshold limit is INR 50,000. Also, the TDS rate of 10% is applicable if the investor submits the PAN details. Else, the applicable TDS rate of 20%.

Canara Bank Recurring Deposits Features

• Tenure: The Canara bank 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 Canara bank RD is INR 50, and in its multiples thereafter. Also, there is no limit on maximum RD investment.
• Tax and TDS: Canara bank RDs do not qualify for tax saving. The interest income that one earns from Canara bank RDs is taxable as per the individual’s respective income tax slab rates. Moreover, Canara bank 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 cuts TDS at 20%.
  One can determine whether Canara bank RD interest income is above or below the TDS threshold limit using the Canara Bank RD Calculator. Also, investors can compute their income tax liability using Scripbox’s Income Tax Calculator.
• Premature withdrawal: Canara bank allows investors to prematurely withdrawal their recurring deposits. However, Canara bank charges a penalty of 1% for prematurely withdrawing the amount. The interest rate in such scenarios is lower than the actual rate.
• Nomination Facility: Depositors can nominate beneficiaries for their Canara Bank RDs.
• Convenience: Opening and managing the recurring deposit investments is easy and convenient through Canara bank’s online portal.
• Loan against RD: Canara bank allows investors to take a loan against recurring deposits. This will helps them to meet liquidity requirements. Furthermore, it saves time for depositors and avoids the hassle of applying for a fresh loan.
  Investors can take loans such as loan against property (home loan), education loans, business loans, etc., against Canara bank RD. Also, one can compute the loan EMI using the loan EMI calculator. Furthermore, the loan EMI calculator also works as a personal loan EMI calculator. Moreover, it works as a home loan calculator and car loan calculator as well. The investor can also use the EMI calculator for different scenarios by changing the interest rate variables.

Canara Bank RD Account Eligibility and Documents Required

• Eligibility: Following is the eligibility criteria for opening a Canara Bank RD account
  • Resident Individuals, including minors
  • HUFs
  • Sole Proprietary firms
  • Partnership firms
  • Companies
  • Associations and trusts
  • NRI’s
• Deposit and account: One can open a Canara Bank recurring deposit account with a minimum investment of INR 50 and in multiples thereafter. However, there is no limit on the maximum investment amount for Canara Bank RD.
• Documents Required:
  • PAN Card,
  • Aadhar Card,
  • Driving license,
  • Government ID card,
  • Senior Citizen Card
  • Utility bills,
  • passport,
  • bank statement with cheque,
  • certificate or ID card issued by the post office
• Withdrawal: Canara Bank allows investors to prematurely withdraw their RD investment, however, with a penalty. The bank charges a 1% penalty on the interest rate for premature withdrawal of the RD investment.
• Nomination: Canara Bank RDs have a nomination facility where the account holder can nominate beneficiaries.

Types of Canara Bank Recurring Deposit Schemes

Canara Bank offers the following recurring deposit schemes:

Recurring Deposits

• Tenure: 6 months – 12 months (in multiples of 3 months)
• Minimum Deposit Amount: INR 50, and in multiples of it thereafter.
• Maximum Deposit Amount: No limit
• Loan facility: Available, up to 90% of the deposit balance
• Tax Deducted at Source: Applicable
• Nomination Facility: Available
• Premature closure: Available, however, with a penalty of 1%.
• Penalty for late deposits: INR 1.50 for every INR 100 instalment per month for RD with five years tenure. INR 2 for every INR 100 instalment per month for RD with more than five years tenure. Also, the delay in remittance for more than four instalments, the RD account will be repaid at simple interest.

Canara Dhanvarsha- A Flexi Recurring Deposit Scheme

• Tenure: 1 year – 10 years (in multiples of 3 months)
• Minimum Deposit Amount: INR 1,000 and further deposits in multiples of INR 100.
• Maximum Deposit Amount: INR 1,00,000
• Loan facility: Available, up to 90% of the deposit balance
• Tax Deducted at Source: No TDS is cut. However, the interest income is taxable as per the investor’s income tax slab rate.
• Nomination Facility: Available
• Premature closure: Available, however, with a penalty of 1%.

Can I open a recurring deposit account for a minor in Canara Bank?

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

Is it possible to renew an RD account in Canara Bank?

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

Conclusion

Canara Bank RDs are considered a good investment for investors who can save small amounts of money regularly. They are low risk investments as they guarantee returns and hence suit investors who prefer guaranteed return from their investments. However, one has to consider the taxes levied on the interest income of RD investments.

Resources

1. Canara Rebeco Mutual Funds
2. Canara Rebeco SIP Calculator
3. Canara Fixed Deposit
4. Canara Bank FD Calculator
5. Canara Bank PPF Calculator