Bank of India Recurring Deposit (RD) Rates

Bank of India Recurring Deposit (RD) account allows you to build up your savings systematically with monthly fixed deposits over some time. Understand the options available under Bank of India’s recurring deposit schemes to save money and earn interest on your payments. Continue reading to see what the Bank of India recurring deposit options have to offer!

Latest update:
The CBDT notifies Form 12BBA, a declaration form, to be submitted by the eligible senior citizens to the specified banks to take relief from filing the ITR.

In Budget 2021, it has been proposed to exempt senior citizens from filing income tax returns if pension income and interest income are their only annual income sources. Section 194P has been newly inserted to enforce that banks deduct tax on senior citizens of more than 75 years of age who have a pension and interest income from the bank.

Recurring Deposit Interest Rates 2022 of Bank of India

The interest rates given below were updated on 1 January 2022.

*Interest rates are subject to change from time to time.

Different Types of Bank of India RD Schemes

1. Recurring Term Deposit:This scheme enables depositors, mostly from the fixed income group, to save by depositing a fixed amount of money every month over a stipulated period. The deposits receive compound interest quarterly. Longer the period, the higher the interest rate.
2. Star Flexi-Recurring Deposit Scheme:This is a unique RD scheme that offers flexibility to the depositor in choosing the core instalment amount and the monthly flexi instalments in multiples of core instalment. Individuals, HUFs, and minors can open an account under this scheme.The core monthly instalment amount can be a minimum of Rs.500 in metro and urban branches and Rs.100 in semi-urban and rural branches. The account’s tenure can range from 12 months up to 10 years in the multiples of 3 months only.

Bank of India RD Special Features and Benefits

• The minimum monthly deposit amount is Rs.500 in metro and urban branches and Rs.100 in semi-urban and rural branches.
• There is no maximum limit on the monthly deposit amount.
• Get competitive interest rates on deposits.
• Option to choose flexibility in instalment payments rather than the regular fixed nature of RD.
• Nomination facility is available.
• Earn an additional interest on every flexi instalment you make over and above the core deposit.
• Set standing instructions for making monthly payments from your savings account.
• Auto-renewal options may not be available for all schemes.

Basic Eligibility Criteria for Bank of India RD

• Individual — Single Accounts
• Two or more individuals — Joint Accounts
• Illiterate Persons
• Blind Persons
• Minors

Tax Liabilities on Bank of India Recurring Deposit

Income tax will be deducted at source (TDS) by the bank if the interest earned on the FD and RD accounts across all the bank branches exceeds Rs.40,000 per financial year. The limit for senior citizens is Rs.50,000. Note that TDS will be applicable at 10%.

TDS is now reduced from 10% to 7.5% due to the pandemic, effective from May 2020 until March 2021. You can submit Form 15G or Form 15H, as applicable, to request the bank not to deduct tax at source only if your annual income is within the basic exemption limit.

RD Interest Rate Calculator

Visit our free RD calculator page to know how much returns you can expect by investing in RD over some time.

Frequently Asked Questions

Is it mandatory to pay the instalments right on the date of opening the account every month?

The bank allows you to make the instalment payment of a particular calendar month until the last working day of that calendar month. If you fail to make the payment by then, a penalty will be imposed on the instalment in arrears at the prevailing rate.

What is the penalty structure for instalments in arrears?

For instalments you have missed to pay within the stipulated time frame, the penalty structure is as follows:

• Rs.1.50 for every Rs.100 per month for deposits with tenure of five years or less.
• Rs.2 for every Rs.100 per month for deposits with tenure over five years.

How is interest calculated under Star Flexi Recurring Deposit Scheme?

The prevailing interest rates will be applied for the core deposit amount you set while opening the account. For any additional sum you deposit, the interest will be separately calculated for the period that stays in the account.

Say, you open the Star Flexi Recurring Deposit account on 1 January 2021 for three years with the core deposit being Rs.1,000 per month. If the prevailing interest rate is 6.4% p.a., you will earn the respective interest considering Rs.1,000 per month for 36 months. If you happen to have surplus funds in March 2021 and deposit Rs.8,000 on 1 April 2021 into the account, the excess deposit of Rs.7,000 will earn interest for 33 months, i.e. two years nine months.

Can senior citizens earn an additional interest rate?

Yes. Senior citizens can get an additional interest rate of 0.50% in the case of a minimum monthly deposit of Rs.100 in the case of the regular RD account and Rs.1,000 in a flexi RD account.

Similar Banks Offering RD