Build up your savings systematically with monthly fixed deposits over a period of time. Avail IDBI bank’s Recurring deposit options to save money and earn interest on your payments. Continue reading to see what the syndicate bank recurring deposit options have to offer!it.
IDBI Bank RD Interest Rates for different Investment Periods
|Investment period||RD rates for regular deposit||RD rates for Senior Citizens|
|1 year||6.75 %||7.25|
|>1yrs to 2yrs||6.5||7|
|>2 yrs to < 3 yrs||6.25||6.75|
|3 yrs to < 5 yrs||6.25||6.75|
|> 5yrs – 7yrs||6||6.5|
|>7 yrs – 10 yrs||6||6.5|
IDBI Bank Recurring Deposit – Interest Rates
- RD rates upto 7.15 % are offered with quarterly compounding.
- Minimum deposits accepted start from Rs 100
- Senior citizens can avail RD rates upto 7.65%
- 90% Loan facility can be availed against RD account
- 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.
- TDS deductions are not applicable on bank deposits.
- You can open your RD account by visiting your nearest IDBI bank branch
Recurring deposit: Is it the best way to save?
Saving a specific amount of money every month can lead to a substantial amount for 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 7.15% 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.
The following individuals/entities are eligible to open a recurring deposit account with IDBI bank
- The individual can open an account in his/her name as well joint account can be opened by 2 individuals.
- A minor can open an RD account under parental guardianship.
- HUFs, companies, government departments, clubs , associations, partnership firms religious/charitable trusts etc. are eligible as well.
IDBI RD: Premature withdrawal Rules
IDBI bank allows account holders to prematurely withdraw money but a nominal amount of penalty might be levied based on the scheme chosen. However, partial withdrawal of amount is not allowed.
Tax benefits on IDBI Bank
All recurring deposits, including IDFC 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
Mandatory documents required for opening a Recurring Bank account with IDBI Bank are as follows:
1. Proof of identity
- PAN card
- Voter ID card
- Driving License
- Government ID card
- Photo ration card
- Senior citizen ID card
2. Address Proof
- Telephone bill
- Electricity bill
- Bank statement with cheque
- Certificate /ID card issued by the post office.