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Recurring Deposits are a boon for all those looking to save money for future emergencies by making regular monthly installments. Kotak Bank’s Recurring Deposit is a valuable RD scheme with a good interest rate and helpful policies. In this article, we bring to you all the important details you need to know before you begin an RD investment with Kotak Bank.

KOTAK Bank RD Interest Rates for different Investment Periods

Investment period RD rates for regular deposit RD rates for Senior Citizens
12 Months 6.75% 7.25%
15 Months 6.75% 7.25%
18 Months 6.75% 7.25%
21 Months 6.75% 7.25%
24 Months 6.60% 7.10%
27 Months 6.60% 7.00%
30 Months 6.60% 7.10%
33 Months 6.60% 7.10%
3 years – less than 4 years 6.25% 6.75%
4 years – less than 5 years 6.25% 6.75%
5 years – 10years 6.00% 6.50%

Recurring Deposit – Interest Rates

  • Kotak Bank offers Recurring Deposit interest rates that go as high as 6.75%
  • The interest on the amount in RD is compounded quarterly
  • The minimum deposit for a Kotak Bank RD starts at Rs. 100.
  • For senior citizens, Kotak Bank offers RD rate up to 7.25%.

Kotak Bank Recurring Deposit

Special Features

  • A minor can also open an RD account with Kotak Bank
  • Kotak Bank provides nomination facility to all its users
  • You can choose a convenient deposit tenure ranging from 12 months to 120 months
  • The minimum amount deposited can be in multiples of Rs. 5,000 or Rs. 10,000
  • This service is available at all Kotak Bank branches
  • Penalty on non-payment or delayed payment of the monthly deposit is calculated at 2% per annum

Recurring Deposit: Should You Choose This Scheme?

The reason to start any type of savings depends on your personal goal. If the goal is to create surplus wealth by making monthly payments, then Recurring Deposit is not the best way to go about it. In fact, you can earn more by investing your surplus savings in Mutual Funds SIP. Before you choose an RD scheme, do take a look at the benefits of Mutual Funds and make the best decision for your future.

Mutual Fund SIPs: How It Benefits You

  • Mutual Fund SIP monthly payments start from a low minimum of Rs. 500. Depending on your convenience, you can choose to make monthly or quarterly payments
  • Mutual Funds are funds that invest in either debt or equity. The Mutual Funds market has been growing of late and in the last 10 years, Equity Linked Mutual Funds (ELSS) have earned high dividends for their investors with an average return rate of 12-22% per year. This is comparatively higher than interest rates on RD scheme which is around 6-8%
  • Mutual Fund SIP accounts are highly liquid; when compared to RD accounts.Unlike the penalty charge levied when you prematurely withdraw money form RD, there is no penalty charged on withdrawal from SIP accounts
  • The interest gains from RD accounts are subject to tax, while the gains from Equity Linked Mutual Fund SIPs (ELSS) are totally exempt from tax

Eligibility Criteria

  • You have to be an Indian resident or a HUF (Hindu Undivided Families) to open a Kotak Bank RD
  • If you are an NRI, you can open an RD account through NRO and NRE accounts
  • If you are a minor, you can open an RD account with the help of your parents who will be supervising your finances

Premature Withdrawal

Kotak Bank Bank users can withdraw money from their RD account even before the RD matures i.e. before the tenure of payment finishes. However, the bank does not allow partial withdrawal of the amount from the RD account.

Tax benefits on Kotak Bank RD

According to the  Income Tax Act 1961, all Recurring Deposits; including Recurring Deposit schemes from Kotak Bank, are subject to tax. This is because the earnings from an RD account is included in your yearly income and becomes a part of your taxable income at the end of the financial year. TDS (Tax Deducted at Source) at the rate of 10% is deducted from the interest earned if the yearly interest amount exceeds Rs.10,000.

However, you can file either Form 15G or Form 15H to save TDS on your RD earnings.

Conditions for submitting Form 15G:

  • You must be 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

Conditions for submitting Form 15H:

  • You are an individual
  • You must be a Resident Indian
  • You are 60 years old or will be 60 years old during the year for which you are submitting the form
  • Tax calculated on your Total Income is nil

Documents required to open Kotak Bank RD account

1. Proof of Identity

  • Passport
  • PAN card
  • Voter ID card
  • Driving licence
  • Government ID card
  • Photo ration card
  • Senior citizen ID card

2. Address proof

  • Passport
  • Telephone bill
  • Electricity bill
  • Bank Statement with Cheque
  • Certificate/ ID card issued by Post office

Types of Recurring Deposit offered by Kotak Bank

Kotak Bank Bank offers different types of Recurring Deposit schemes for the benefit of its users. The most common of this is the Regular RD scheme.

Regular RD: Create a rainy-day fund and secure your future by investing regular monthly amounts in your Kotak Bank RD scheme. The minimum tenure for this RD account is 6 months, and you can increase it to a maximum of 10 years. 

RD Interest Rates in India

Many people in India opt for an RD savings scheme and the interest rates for the schemes vary from one bank to another. The rates depend on the goal of the RD scheme chosen, the tenure, and the minimum monthly deposit amount. Generally, higher interest rates are given for RD with tenure of 15 months and above. Also, senior citizens and women, investors may enjoy higher interest rates for RD schemes in some banks.

Similar Banks Offering RD

Similar Banks Offering RD
SBI Bank HDFC Bank Union Bank of India IDFC Bank
AXIS Bank IDBI Bank Bank of India Canara Bank
Bank of Baroda Allahabad Bank PNB Andhra Bank
Central Bank of India Corporation Bank RBL Bank
Syndicate Bank ICICI Bank Indian bank

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