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Union Bank of India Recurring Deposits (RD) encourage you to develop a healthy saving habit. Not only do you save money but also earn interest on your deposits. With the scheme, you can save a designated amount every month and improve your saving habit. Continue reading to see what Union Bank of India’s recurring deposit schemes have to offer.

1. Recurring Deposit Interest Rates 2021 of Union Bank of India

The interest rates in the table below are updated on 7 January 2021.

Deposit Tenure

Interest Rates for Regular Customers (% p.a.)*

Interest Rates for Senior Citizen (% p.a.)*

180 days to 364 days

5.50

5.50

1 year

5.75

5.75

1 year 1 day to 443 days

5.75

5.75

444 days

5.85

5.85

445 days to 554 days

5.75

5.75

555 days

5.90

5.90

556 days to 2 years 12 months 31 days

5.75

5.75

3 years to 10 years

5.80

5.80

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

2. Different Types of Union Bank of India RD Schemes

  1. Union Cumulative Deposit Scheme:

    The scheme is targeted to benefit the lower, lower-middle, middle, upper-middle and salaried class of society. It encourages small investors to save in the form of monthly instalments over a fixed term. The depositor will receive a passbook when the account is opened. The minimum monthly instalment is Rs.50, and there is no upper limit. The tenure can range from 6 months to 120 months.

  2. Union Monthly Plus:

    This is a novel user-friendly RD scheme that offers a flexible step up and step down options in monthly instalments. Initially, the depositor must declare the core amount for the monthly instalment and deposit the same amount as the first instalment. The scheme allows you to deposit the money multiple times within a single month.

    The maximum deposit amount permitted is 10 times the core amount or Rs.1 lakh, whichever is lower. After stepping up, you can also reduce the instalment amount at any time; but not less than the core amount.

    The minimum monthly deposit can be Rs.100 and in the multiples of Rs.100 thereafter. The maximum core amount allowed is Rs.1 lakh. The deposit tenure can range from 6 months up to 60 months.

3. Union Bank of India RD Special Features and Benefits

  • The minimum monthly instalment allowed is as low as Rs.50.
  • The minimum period allowed is 6 months, whereas the maximum period is 120 months.
  • Competitive interest rates are offered.
  • Nomination facility is available as per bank guidelines.
  • Loan/overdraft facility is available against the deposit account.
  • No penalty will be charged in the case of premature closure.
  • Automatic renewal facility is not available.

4. Basic Eligibility Criteria for Union Bank of India RD

  • Resident Individuals
    • Single accounts
    • Two or more individuals in joint accounts
    • Illiterate persons
  • Visually impaired persons
  • Purdanasheen Ladies
  • Minors
  • Hindu Undivided Families (HUFs)
  • Associations, clubs, societies, etc.
  • Trusts, institutions/agencies permitted explicitly by the RBI in single/joint names

5. Tax Liabilities on Union Bank of India Recurring Deposit

If the interest earned on your fixed deposit is more than Rs 40,000 during the financial year, the bank deducts tax at source at 10%. This rate has been reduced to 7.5% due to COVID-19 pandemic from May 2020 to March 2021. Further, the tax levied on the returns is dependent on the tax bracket you fall into irrespective of the interest rate or other factors.

6. 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.

7. Frequently Asked Questions (FAQs)

Q. Can I alter the RD tenure at a later time?

A. You are not allowed to alter the RD tenure once selected. However, suppose you happen to discontinue paying instalments for a valid reason. In that case, you may convert the cumulative deposit account into a term deposit account before maturity provided that the term deposit tenure is longer than the remaining period of cumulative deposit account. In this case, you will have to bear the arrears of the monthly instalments and penalty for the delay in payment.

Q. Can I request to alter the monthly instalment amount at a later date if I cannot afford to make the payments?

A. No. The monthly instalment amount cannot be altered once selected at the time of opening the account.

Q. How and when is the interest compounded and paid for the Cumulative Deposit scheme?

A. The interest will be compounded every quarter and will be credited to your account on a half-yearly basis. The interest will be paid to you at the time of maturity or one month after the last instalment is deposited, whichever is later.

Q. How is interest calculated for the Union Monthly Plus scheme?

A. Since the monthly instalment can vary from time to time, the interest will be calculated daily and credited to the account quarterly.

Similar Banks Offering RD

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

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