Recurring deposit schemes are a wonderful way to build your savings over a period of time through regular monthly deposits. Not only do you save money but also earn interest on your deposits. Continue reading to see what IDFC bank’s recurring deposit options have to offer.t.
IDFC Bank RD Interest Rates for different Investment Periods
|Investment period||RD rates for regular deposit||RD rates for Senior Citizens|
IDFC Bank Recurring Deposit Interest Rates
- RD interest rates up to 7.25% are offered with interest compounded quarterly.
- Senior citizens can avail RD rates upto 7.75%
- IDFC Bank accepts minimum deposits starting at Rs. 2,000 and maximum monthly deposit has a cap of Rs 75,000
IDFC Bank Recurring Deposit: Special Features
- 90% Loan facility can be availed against RD account
- Nomination facility is available to any family member or spouse can be nominated to receive the final amount
- No penalty will be levied in case of delayed payments or missed EMI
- 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.
- You can open your RD account by visiting your nearest IDFC bank branch.
IDFC 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 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 7.25% 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.
IDFC Bank RD: Eligibility criteria
The most important eligibility criteria for opening an RD account with IDFC bank is:-
- You need to have a pre-existing savings account with IDFC bank or open a new one. Documents for age and citizenship proof are needed as well.
- The minimum monthly deposit should be Rs 2000 and the maximum cannot be more than Rs 75000
IDFC Bank: Premature withdrawal rules
No penalty is levied in case monthly payment is missed. However, in case of premature withdrawal, some penalty may be levied based on bank policies.
Tax benefits on IDFC 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
Documents Required to Open IDFC bank 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.