Recurring deposits encourage a healthy saving habit for income regularisation. Not only do you save money but also earn interest on your deposits. Continue reading to see what Union Bank’s recurring deposit options have to offer.
Union Bank of India RD Interest Rates for different Investment Periods
|Investment period||RD rates for regular deposit||RD rates for Senior Citizens|
|180 days to 364 days||7.05%||7.55%|
|1 year 1 day to 3 years||7.25%||7.75%|
|3 years 1 day to 5 years||7.25%||7.75%|
|5 years 1 day to 10 years||7.25%||7.75%|
Union Bank of India Recurring Deposit Interest Rates
- Interest rates upto 7.25%are offered on RD with quarterly compounding.
- The customer needs to decide the core amount at the time of account opening. Monthly installment minimum amount Rs.50 and in multiples of Rs.10 thereafter
- Senior citizens can avail upto 7.75% interest rate on RD
Union Bank of India Recurring Deposit: Special Features
- Nomination facility is available to any family member or spouse can be nominated to receive the final amount
- No penalty is levied in case of premature withdrawal of deposit as well as delayed installment payments.
- The deposit tenure ranges from 6 to 120 months in multiples of one month
- Interest rates are calculated on daily product basis
- TDS deductions are subject to existing income tax rules at the time of RD account opening.
- Loan facility upto 75% of RD amount can be availed
- You can open your RD account and avail the above-mentioned options at your nearest Union Bank of India branch
Union Bank Recurring Deposit: Is it the best way to save?
Saving a specific amount of money every month can lead to a substantial amount as 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 7.00% interest rate may not give you the returns needed to create a substantial retirement fund. However, depositing the same amount in a Mutual Fund as SIP (Systematic Investment Plan) can help you achieve your financial goals.
The benefits of investing in SIPs
- A small amount of money that can be as low as Rs 500 can be deposited 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.
- Returns from SIPs which invest in Equity Linked Mutual Funds (ELSS) are tax exempt whereas the gains from an RD is taxable.
Union Bank: Eligibility Criteria
- Resident Indians in the form of single accounts, joint accounts, minors, persons can open an RD account
- Corporates, clubs, institutions, sole proprietors, associations, firms, and HUFs can open an RD account as well.
Union Bank RD: Premature withdrawal Rules
- Unlike other banks, Union bank does not levy penalty on premature closure of amounts or delayed payment of installments.
Tax benefits on Union bank RD
All recurring deposits, including Union Bank of India 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 Union 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.