Build up your savings systematically with monthly fixed deposits over a period of time.Avail Bank of India’s recurring deposit options to save money and earn interest on your payments. Continue reading to see what the Bank of India recurring deposit options have to offer!
Bank of India RD Interest Rates for different Investment Periods
|Investment period||RD rates for regular deposit||RD rates for Senior Citizens|
|180 days to 269 days||6.75%||7.25%|
|270 days to 364 days||6.90%||7.40%|
|1 year to 1 year 364 days||7.00%||7.50%|
|2 years to 2 years 364 days||7.00%||7.50%|
|3 years to 4 years 364 days||6.90%||7.40%|
|5 years to 7 years 364 days||6.90%||7.40%|
|8 years to 10 years||6.90%||7.40%|
Bank of India Recurring Deposit Interest Rates
- RD interest rates up to 7.00% are offered and interest on RD is compounded quarterly.
- Minimum deposit accepted starts from Rs 500
- Upto 7.5% RD rate is offered to Senior citizens
Bank of India Recurring Deposit: Special Features
- Deposit tenure ranges from 6 to 120 months.
- Nomination facility is available to any family member or spouse can be nominated to receive the final amount
- TDS deductions are subject to existing income tax rules at the time of RD account opening.
- Penalty on non-payment of the periodic deposit is Rs. 1.50 for every Rs. 100/- p.m. for deposits of 5 years and less Rs. 2.00 for every Rs. 100/- p.m. for deposits of over 5 years
- The facilities can be availed at your nearest Bank of India branch
Bank of India Recurring Deposit: Is it the best way to save?
Saving a specific amount of money every month can lead to a substantial amount as 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 substantial 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.
- Returns from SIPs which invest in Equity Linked Mutual Funds (ELSS) are tax exempt whereas the gains from an RD is taxable.
Bank Of India: Eligibility Criteria
- Individuals in the form of single accounts, joint accounts, minors, blind and illiterate persons are eligible for RD schemes
- HUFs, institutions, partnership firms, sole proprietorships, commercial enterprises etc are eligible as well
Bank of India: Premature withdrawal rules
If the account is deactivated within the first three months of opening, the bank is not liable to pay interest on the deposit amount. If the deposit is withdrawn before the term ends, an applicable penalty in the form of reduced interest rate for the last quarter will be levied. Partial withdrawal of money is not allowed.
Tax benefits on Bank of India RD
All recurring deposits, including Bank of India 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 India 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.