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IDBI Bank RDs allow investors to invest in small amounts regularly for a fixed tenure. The interest rates of IDBI Bank RDs range between 5.75%-5.9% for regular citizens. For senior citizens, the RD interest rates range between 6.25%-6.4%. Also, the IDBI RD rates are higher than bank saving accounts. This article covers IDBI Bank RDs and its interest rates in detail.

IDBI RD Interest Rates 2021

Following are the IDBI Bank recurring deposit rates for different tenures.

IDBI Bank RDs have interest rates that range between 5.75% to 5.9% for a tenure of 1 year to 10 years. For senior citizens, the interest rates range between 6.25%-6.4%. IDBI Bank offers additional interest rates to senior citizens on their RD investments. Also, the IDBI RD rates are higher than bank savings accounts. One can estimate the returns from IDBI Bank RDs using an IDBI recurring deposit calculator. The IDBI Bank Recurring Deposit Rate is dependent on the age of the investor, tenure of the investment, RBI policies and current economic condition in the country.

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

TenureGeneral RD RatesSenior Citizen RD Rates
1 year5.85%6.35%
1 year 1 day to 5 years5.75%6.25%
5 years5.90%6.40%
2 years 1 day to 10 years5.80%6.30%
Note: IDBI Bank RD rates are subject to change

IDBI Bank Recurring Deposits

Following are the key features of IDBI bank recurring deposits:

Tenure

The IDBI Bank recurring deposit tenure ranges between 12 months to 120 months.

Minimum and Maximum Deposit Amount

The minimum amount of investment in IDBI bank RD is INR 100. Also, for IDBI bank RDs there is no limit on the maximum investment amount.

IDBI Bank Recurring Deposit Rate

IDBI Bank recurring deposit rates are in the range of 5.75%-5.90%. Furthermore, one can calculate potential returns from the bank recurring deposits using the recurring deposit calculator.

Preferential Interest Rates

IDBI Bank offers additional interest rates for senior citizen depositors. Senior citizen depositors are eligible to get an additional 0.5% on IDBI RD investments. The IDBI RD interest rates are in the range between 6.25%-6.40%.

Tax and TDS

IDBI RD schemes do not qualify for tax saving. The interest income from IDBI RDs is taxable as per investor’s income tax slab rates. Moreover, the 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 rate is applicable only in case the PAN details are submitted; else the bank cuts TDS at 20%.

Also, one can determine whether IDBI RD interest income is above or below the TDS threshold limit using the RD calculator. Furthermore, one can estimate their income tax liability using the Scripbox Income Tax Calculator.

Premature withdrawal

IDBI bank allows investors to prematurely withdraw their recurring deposits. However, investors are charged a penalty for it.

Nomination Facility

Depositors can nominate beneficiaries for their IDBI RDs.

Convenience

Opening and managing the recurring deposit investments is easy and convenient through the IDBI Bank’s online portal.

Loan against RD

IDBI allows investors to take a loan against recurring deposits. This helps in meeting liquidity requirements. Furthermore, it eliminates the hassle of applying for a new loan.

Investors can take loans such as home loans (loan against property), education loans, motor loans, etc., against IDBI RD. Also, one can compute their loan EMI using the loan EMI calculator. Furthermore, the loan EMI calculator works as a personal loan EMI calculator, car loan calculator, and also home loan calculator. The investor can also use the EMI calculator for comparing scenarios by changing the variables such as interest rate.

Requirements of IDBI Bank RD Scheme

Eligibility

To be able to open an IDBI recurring deposit account, one has to be eligible. Following is the eligibility criteria:

  • Individuals, including NRIs
  • HUFs

Deposit and account

One can invest in IDBI RD with a minimum amount of INR 100. There is no upper limit for IDBI RDs. The bank charges a penalty for delay in instalment payments.

Documents

Following are the documents required for opening an RD account in IDBI Bank:

  • RD application form – duly filled and signed.
  • Passport size photographs
  • ID Proof – PAN Card, Aadhar Card, Voter ID, Driving License
  • Proof of Residence – Aadhar Card, Utility Bills, Driving License
  • Proof of Age – Birth Certificate, Matriculation certificate, PAN Card

Withdrawal

One can prematurely withdraw their RD investment with IDBI Bank. However, the bank will charge a penalty of 1% on the interest.

Tax

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

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

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

Nomination

IDBI Bank RDs have a nomination facility where the account holder can nominate beneficiaries.

Types of Deposit Schemes

IDBI offers the following recurring deposit schemes:

Systematic Savings Plan (SSP)

IDBI Systematic Savings Plan (SSP) helps save at their convenience. One can start saving any fixed amount from INR 100 to less than INR 2 crore every month. The scheme is suitable for pre-planned financial goals.

  • Tenure: 1 year – 10 years
  • Minimum Deposit Amount: INR 100
  • Maximum Deposit Amount: INR 2 crore
  • Nomination Facility: Available

Systematic Savings Plan Plus (SSP Plus)

The SSP Plus scheme offers Regular savings with Principal + Interest protection and also Complimentary Insurance cover along with reward points.

  • Tenure: 3 years – 10 years
  • Minimum Deposit Amount: INR 5,000 and in multiples of INR 100 thereafter.
  • Maximum Deposit Amount: INR 2 crore
  • Reward points: Complimentary redeemable reward points up to 1,000
  • Personal Accident Insurance Cover: Complimentary cover up to INR 5,00,000
  • Loan facility: Available up to 95% on the deposit balance
  • Tax Deducted at Source: Applicable. No TDS is deducted if the depositor submits Form 15G/ 15H.
  • Nomination Facility: Available
  • Premature closure: Applicable; however, the accidental cover offered will be withdrawn from the date of closure. 

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

IDBI Bank offers varying interest rates for RDs and Fixed Deposits. Following are IDBI recurring deposit interest rates:

TenureGeneral RatesSenior Citizen Rates
1 year5.85%6.35%
1 year 1 day to 2 years5.75%6.25%
2 years 1 day to 3 years5.80%6.30%
3 years 1 day to 5 years5.75%6.25%
5 years5.90%6.40%
5 yrs 1 day to 10 yrs5.80%6.30%

Following are the IDBI bank fixed deposit interest rates:

TenureFixed Deposit Interest Rates (FD)Senior Citizen Fixed Deposit Interest Rates
7 days to 14 days2.90%3.40%
15 days to 30 days2.90%3.40%
31 days to 45 days3.00%3.50%
46 days to 60 days3.25%3.75%
61 days to 90 days3.25%3.75%
91 days to 6 months3.80%4.30%
271 days to 364 days4.30%4.80%
6 months 1 day to 270 days4.30%4.80%
1 year5.00%5.50%
1 yr 1 day to 2 years5.10%5.60%
2 yrs 1 day to 2 years 364 days5.10%5.60%
3 yrs 1 day to 4 years 364 days5.10%5.60%
5 years5.10%5.60%
5 years 1 day to 7 years5.10%5.60%
7 yrs 1 day to 10 years5.10%5.60%
10 yrs 1 day to 20 years4.80%5.30%

Conclusion

IDBI Bank RDs are considered a good investment for investors who want to save a small amount of money regularly. Through IDBI RDs, investors can invest monthly in the scheme. Since the IDBI RD scheme guarantees income at the time of maturity, it is a low-risk investment. Hence investors who are looking for guaranteed returns from their investment can invest in this scheme. However, they have to take into consideration the tax that they have to pay on the interest income from IDBI RDs.

Frequently Asked Questions

What are the limits on the minimum and maximum deposits?

Yes, an IDBI RD account requires a minimum deposit amount of INR 100 per month. And, the maximum limit on the deposit amount is INR 2 crore.

Can I open a recurring deposit account for a minor?

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

How to apply for IDBI Bank RD?

One can open an IDBI Bank RD account through offline and online modes. For online mode, one has to visit the IDBI website. And for offline mode, one has to visit the nearest branch of IDBI Bank.
To be able to invest in IDBI Bank RD, one needs to have all valid documents. They need to have an RD application form, duly filled and signed and passport size photographs. For ID proof, they need a PAN card, Aadhar card, voter ID, and driving license. Proof of residence requires a Aadhar card, utility bills, and driving license. For age proof, they need a birth certificate, matriculation certificate, and PAN card

Is it possible to renew an RD account?

No, it is not possible to renew an IDBI Bank RD account.