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Save Upto Rs. 45,000 Taxes by Investing in ELSS

It is always good to have a rainy day fund to fall back on in case of emergencies. A good way of building up your savings is by investing in a recurring deposit scheme. With attractive recurring deposit options offered by Andhra bank, not only can you save money , but also earn interest on your monthly deposits over a period of time. Continue reading to see what the Andhra bank recurring deposit options have to offer!

Andhra Bank RD Interest Rates for different Investment Periods

Investment period RD rates for regular deposit RD rates for Senior Citizens
6 months to 8 months 29 days 6.25% 6.75%
9 months to 364 days 6.25% 6.75%
1 year to 2 years 7.00% 7.50%
2 years 1 day to 3 years 6.50% 7.00%
3 years 1 day to 5 years 6.50% 7.00%
5 years 1 day to 10 years 6.50% 7.00%

Andhra Bank Recurring Deposit Interest Rates

  • RD interest rates upto 7% are offered with quarterly compounding
  • Minimum deposit accepted starts from Rs 100
  • Senior citizens can avail RD rates upto 7.5%

Andhra Bank Recurring Deposit : Special Features

  • No cap on maximum amount that can be deposited.
  • Nomination facility is available so any family member or spouse can be nominated to receive the final amount
  • The deposit tenure ranges from 6 months to 120 months
  • The minimum amount can deposited in multiples of Rs. 100
  • TDS deductions will be as per existing income tax rules at the time of RD account opening.
  • Penalty levied on non payment of periodic deposit ranges from Rs 10 to Rs 50 as applicable.
  • The RD account is linked with savings account for easy mapping and debit instructions and RD account can easily be managed with internet and mobile banking options.

Andhra Bank Recurring deposit: Is it the best way to save?

Saving a specific amount of money every month can lead to a substantial amount for emergency fund in the long term.Recurring deposit options can be availed to do so. However they are not the best saving option if wealth creation is the objective. Let’s see you plan on saving for your retirement. A Recurring Deposit with 7% interest rate may not give you the returns needed to create a decent retirement fund. However, depositing the same amount in a Mutual Fund as SIP (Systematic Investment Plan) can help you create the kind of wealth you are aiming for.

The Benefits of Investing in SIPs

  • A small amount of money that can be as low as Rs 500 has to  be deposited by you every month or every quarter.
  • On the basis of your budget and investment goal, your money will be invested in debt or equity funds. In the past decade, Equity Linked mutual funds have performed well in the market with a return of 12-22%. This will give significantly higher returns than recurring deposits.
  • There is no penalty on money withdrawal from SIP account. This means that SIPs have higher liquidity when compared to recurring deposits that levy a penalty on premature withdrawal.

Andhra Bank RD : Eligibility criteria

  • Individuals can open an account singly or jointly
  • Minors above 10 years of age can open an account provided they produce valid proof of age at the time of account opening
  • Minors below 10 years of age can open an account under parental guardianship
  • Proprietorship, partnership firm, HUFs, commercial organization, company, club , society , charitable  trust , educational institutions etc are eligible
  • The account can be opened by illiterate and blind persons as well.

Andhra Bank : Premature withdrawal rules

In case of premature withdrawal following penalty rates are applicable if account is closed before 6 months terms .

  • Rs.10 if the outstanding balance in the RD account is less than Rs.100
  • Rs.20 if the balance is between Rs.100 to Rs.1,000.
  • Rs.50 for all any balance value exceeding 1,000 rupees.

Tax Benefits on Andhra Bank RD

All recurring deposits , including Andhra bank recurring deposit, are taxable under the Income Tax Act 1961. The money that is invested in RD will be included in your yearly income and a TDS ( Tax deducted at Source) of 10% is applicable on the interest earned ( If it is more than (if it is more than RS. 10,000 per year).To save TDS on your RD gains, you can fill either Form 15G or Form 15H.

Conditions for submitting Form 15G:

  • You are an individual or HUF
  • You must be a Resident Indian
  • You should be less than 60 years old
  • Tax calculated on your Total Income is nil
  • The total interest income for the year is less than the minimum exemption limit for that year, which is Rs 2,50,000 for the financial year 2016-17

Documents Required to Open Andhra bank RD Account

Proof of identity

  • Passport
  • PAN card
  • Voter ID card
  • Driving License
  • Government ID card
  • Photo ration card
  • Senior citizen ID card

Address Proof

  • Passport
  • Telephone bill
  • Electricity bill
  • Bank statement with cheque
  • Certificate /ID card issued by post office.
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