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Indian Bank recurring deposits RD allow investors to invest in small amounts regularly for a fixed tenure. The Indian Bank recurring deposit rate ranges between 3.95% to 5.25% for regular citizens. For senior citizens, the RD interest rates range between 4.45%-5.75%. Also, the Indian Bank recurring deposit interest rates are higher than their saving account rates. This article covers Indian Bank RDs and its interest rates in detail.

Indian Bank RD Interest Rates 2021

Following are the Indian Bank RD interest rates for different tenures.

Indian Bank RDs have interest rates that range between 3.95% to 5.25% for a tenure of 6 months to 10 years. Also, for senior citizens, the interest rates range between 4.45%-5.75%. Indian Bank offers additional interest rates to senior citizens on their RD investments. Also, the Indian Bank recurring deposit interest rates are higher than their saving account rates. Indian Bank pays interest on the minimum balance between the 10th day and last day of the month. Furthermore, one can estimate the returns from Indian Bank RDs using an Indian Bank recurring deposit calculator. Also, Indian Bank RD interest rates are dependent on the age of the investor, tenure of the investment, RBI policies and current economic condition in the country.

Furthermore, interest income from Indian Bank 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, Indian Bank deducts a TDS of 10% if the interest income exceeds INR 40,000 (INR 50,000 for senior citizens). Also, Indian Bank cuts 20% if the investor doesn’t submit PAN Card details.

TenureGeneral RD RatesSenior Citizen RD Rates
180 days3.95%4.45%
181 days to 364 days4.45%4.95%
1 year5.25%5.75%
1 year 1 day to 10 years5.15%5.65%
Note: Indian Bank RD rates are subject to change

Indian Bank Recurring Deposits

Following are the key features of Indian bank recurring deposits:

Tenure

The Indian Bank recurring deposit tenure ranges between 6 months to 120 months.

Minimum and Maximum Deposit Amount

The minimum amount of investment in Indian bank recurring deposits RD is INR 100 and in its multiples thereafter. Also, the scheme has no limit on the maximum investment amount.

Indian Bank Recurring Deposit Rate

Indian Bank RD interest rates are in the range of 3.95%-5.25%. Furthermore, one can calculate potential returns from Indian Bank recurring deposits using the recurring deposit calculator.

Preferential Interest Rates

Indian bank offers additional interest rates for senior citizen depositors. Also, senior citizen depositors get an additional 0.50% on Indian Bank RDs. Furthermore, the Indian bank RD interest rates are in the range between 4.45%-5.75%.

Tax and TDS

Indian bank RD schemes do not qualify for tax saving. The interest income from Indian bank RDs is taxable as per investor’s income tax slab rates. Moreover, the Indian 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 when the PAN details are submitted, else the bank charges TDS at 20%.

Also, one can determine whether Indian bank recurring deposit interest income is above or below the TDS threshold limit using the RD calculator. Furthermore, one can estimate income tax liability with the help of Scripbox Income Tax Calculator.

Premature withdrawal

The Indian bank allows investors to prematurely withdraw their recurring deposits. However, it attracts a penalty.

Nomination Facility

Depositors can nominate beneficiaries for their Indian Bank RDs.

Convenience

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

Loan against RD

The Indian bank allows investors to take a loan against recurring deposits. Furthermore, this enables them to meet their liquidity requirements. Moreover, the hassle of applying for a new loan is eliminated.

Investors can take loans such as home loans (loan against property), motor loans, education loans, etc., against Indian Bank recurring deposits. Also, individuals can compute their loan EMI using the loan EMI calculator. Furthermore, the loan EMI calculator works as a home loan calculator, car loan calculator, and personal loan EMI calculator. Moreover, the investor can use the EMI calculator for comparing various scenarios by changing the variables such as interest rate.

Requirements of Indian Bank RD Scheme

Eligibility

To be able to open an Indian Bank RD account, one has to be eligible. Following is the eligibility for investing in Indian Bank RD:

  • Resident individuals, including minors
  • Non-resident individuals,
  • HUFs

Deposit and account

One can open an Indian Bank RD account with a minimum investment of INR 5. Also, there is no upper limit for Indian Bank RD. Furthermore, for Indian Bank variable recurring deposit schemes, the bank will not charge any penalty if the instalment payments are delayed.

Documents

Following are the documents required to invest in Indian Bank RDs:

  • Identity proof – Driving License, Voter ID, Aadhar Card, PAN Card, Senior Citizen Card, and any Government ID card.
  • Residence proof – Passport, Utility Bills, Bank statement with cheque, and the certificate is given by Post Office.

Withdrawal

Indian Bank allows investors to prematurely withdraw their RD investments. For deposits (less than INR 5 lakhs) held for a tenure of 181 days, the bank will not charge a penalty. However, if the deposits are held for less than 181 days, then the bank will charge a penalty of 1% on the interest amount. Also, for all deposits above INR 5 lakhs, the bank will charge a penalty of 1% on the interest if the investment is prematurely withdrawn.

Tax

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

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

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

Nomination

Indian Bank allows investors in RD to nominate a beneficiary from the family to receive the final amount.

Types of Deposit Schemes

Indian offers the following recurring deposit schemes:

Recurring Deposit

It is a regular monthly savings scheme that has the capability to grow into a large sum. This helps investors in meeting their financial goals and also needs at the end of the investment tenure.

  • Tenure: 6 months to 10 years (in multiples of 3 months)
  • Minimum Deposit Amount: INR 100 and in its multiples thereafter
  • Maximum Deposit Amount: No limit. However, no single deposit is allowed in a day for more than INR 2 crore, within the overall limit of INR 10 crore tagged to a single CIF.
  • Nomination Facility: Available
  • Tax Deducted at Source: Applicable
  • Loan Facility: Available
  • Premature closure: Available, however, attracts a penalty.

Variable Recurring Deposit

The variable recurring deposit scheme comes with the option of varying monthly instalments.

  • Tenure: 36 months
  • Initial Deposit Amount: INR 500 and in multiples of INR 100 thereafter, up to a maximum of INR 1,00,000.
  • Maximum Deposit Amount: INR 10,00,000 per month.
  • Nomination Facility: Available
  • Tax Deducted at Source: Applicable
  • Loan Facility: Available
  • Premature closure: Available, however, attracts a penalty.
  • Delayed instalments: No penalty for delay in instalments

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

The Indian bank offers varying interest rates for RDs and FDs. Following are Indian bank recurring deposit interest rates:

TenureGeneral RatesSenior Citizen Rates
180 days3.95%4.45%
181 days to 269 days4.45%4.95%
9 months to 364 days4.45%4.95%
1 year5.25%5.75%
1 year 1 day to 1 year 364 days5.15%5.65%
2 years to 2 years 364 days5.15%5.65%
3 years to 10 years5.15%5.65%

Following are the Indian Bank FD interest rates:

TenureFixed Deposit FD Interest RatesSenior Citizen FD Interest Rates
7 days to 14 days2.90%3.40%
15 days to 29 days2.90%3.40%
30 days to 45 days2.90%3.40%
46 days to 90 days3.05%3.55%
91 days to 180 days3.95%4.45%
121 days to 180 days3.95%4.45%
181 days to 269 days4.40%4.90%
9 months to 364 days4.40%4.90%
1 year5.00%5.50%
1 yr 1 day to 1 year 364 days5.10%5.60%
2 yrs to 2 years 364 days5.10%5.60%
3 yrs to 4 years 364 days5.15%5.65%
5 years to 10 years5.15%5.65%

Invest in the fixed deposits that best suit your needs.

Conclusion

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

Frequently Asked Questions

What are the limits on the minimum and maximum deposits?

Yes, Indian Bank recurring deposit account requires a minimum deposit amount of INR 100 per month, and also there is no maximum limit on the deposit amount. 

Can I open a recurring deposit account for a minor?

Yes, a minor can open Indian Bank recurring deposit account, however under the guardianship of their parents or legal guardian.

How to apply for Indian Bank RD?

One can open an Indian Bank recurring deposit account through offline and also online modes. For online mode, one has to visit the Indian Bank website. And for offline mode, one has to visit the nearest branch of Indian Bank.
To be able to invest in Indian Bank RD, one needs to have the following valid documents. For identity proof, one needs to have the following: a driving license, voter ID, Aadhar card, PAN card, senior citizen card, and any Government ID card. For residence proof, one needs to have the following: a passport, utility bills, bank statement with cheque, and certificate given by Post Office.

Is it possible to renew an RD account?

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

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