Recurring deposits encourage a healthy saving habit for income regularisation. Not only do you save money but also earn interest on your deposits. Continue reading to see what Bank of Baroda’s recurring deposit options have to offer
Bank of Baroda RD Interest Rates for different Investment Periods
|Investment period||RD rates for regular deposit||RD rates for Senior Citizens|
|181 days to 270 days||6.75%||6.75%|
|271 days to 364 days||7.00%||7.00%|
|1 year 1 day to 2 years||7.00%||7.00%|
|2 years 1 day to 3 years||6.85%||6.85%|
|3 years 1 day to 5 years||6.50%||6.50%|
|5 years 1 day to 10 years||6.50%||6.50%|
Bank of Baroda Recurring Deposit Interest Rates
- RD rates offered are up to 7.00% with interest on RD compounded quarterly
- Minimum amount accepted is as low as Rs 50
- RD rate of 7% offered to senior citizens
Bank of Baroda Recurring Deposit: Special Features
- Loan facility upto 95% of the RD amount can be availed.
- Nomination facility is available to any family member or spouse can be nominated to receive the final amount
- The deposit tenure ranges from 6 months to 120 months.
- TDS deductions will be as per existing income tax rules at the time of RD account opening.
- Minimum amount can be deposited in multiples of Rs 100
- The facilities can be availed at your nearest Bank of Baroda branch.
- Facilities for quarterly and half-yearly RD are also available under their schemes
Bank of Baroda Recurring Deposit: Is it the best way to save?
Saving a specific amount of money every month can lead to a substantial amount of the 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 6.75% 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 achieve your financial goals.
The benefits of investing in SIPs
- A small amount of money that can be as low as Rs 500 can be deposited 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.
Bank of Baroda RD: Eligibility Criteria
- To open an account, one must be an Indian resident or a HUF (Hindu Undivided Families)
- An NRI can also open the RD account through NRO and NRE accounts
- If you are a minor, you can also open an RD account under the guardianship of your parents who will supervise the finances
Bank Of Baroda RD: Premature withdrawal rules
- 1% deduction on applicable interest rate according to RD scheme chosen will be applicable if the depositor decides to prematurely withdraw the deposited amount. However, partial withdrawal of amount is not allowed.
Tax Benefits on Bank of Baroda RD
All recurring deposits, including Bank of Baroda 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 Bank of Baroda RD Account
Proof of identity
- PAN card
- Voter ID card
- Driving License
- Government ID card
- Photo ration card
- Senior citizen ID card
- Telephone bill
- Electricity bill
- Bank statement with cheque
- Certificate /ID card issued by the post office.