Canara Bank offers different kinds of fixed deposits or term deposits option to domestic as well as NRI customers. The Canara Bank FD interest rates on these deposits are decent and provide guaranteed returns to its investors. Canara Bank offers higher fixed deposits interest rates to senior citizens. This article throws light on the rate of interest on FD in Canara bank.Read more
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Up to a year, the highest rate of interest for FD is 5.40%. For a tenure of more than a year, it’s 5.35% and for a tenure of 3 years to 10 years, it is 5.30%. If carefully examined, the Canara Bank FD rates are found closer to each other after the maturity period of 1 year.
The Canara Bank FD interest rates are less in case the FD grows to the highest maturity period of ten years. This is due to the evaluation of Canara Bank FD interest rates in which it diminishes in a few years.
So, the bank fixes the range of positive degenerating relations and establishes the rate of interest a little lower than a fallback contract in case of long-term investments lying between 5 years and 10 years.
The Canara Bank offers four types of fixed deposit schemes for domestic customers. They are:
Take a look at each of these schemes in detail:
The Regular Fixed Deposit Scheme allows a person to park his/her savings into the FD account to earn attractive returns on it. The scheme is low on risk and comes with a lot of flexibility. Some of the features of the Regular FD Scheme are:
The Tax Saver Deposit Scheme is a fixed deposit scheme that allows a person to earn tax deductions on his/her investments for up to Rs 1.5 lakh per financial year as per Section 80C of the IT Act, 1961. Some of the features of the Tax Savers Deposit Scheme are:
The Kamdhenu Deposit Scheme is a re-investment plan that allows people to earn compound interest on their investments. Some of the features of Kamdhenu Deposit Scheme are:
The Ashraya Deposit Scheme has been designed for senior citizens who have existing FD account or Kamdhenu deposit account. It allows the depositors aged 60 years and above to earn a higher interest rate on fixed deposits. Some of the features of Ashraya Deposit Scheme are:
By using a Canara Bank FD calculator online, you can easily calculate the maturity value of your fixed deposits.
The FD calculator determines the maturity amount at the end of the term by taking into consideration the tenure of fixed deposits, Canara Bank FD rates, the amount deposited and compounding frequency of interest on deposits.
The Canara Bank fixed deposit schemes come with two types of special maturity features:
The automatic deposit renewal feature renews your fixed deposit automatically on its date of maturity. It is renewed for the same deposit period at the prevailing Canara Bank FD rates as on the date of maturity. This feature is applicable in case the depositor opts for it at the time of opening the FD and also if no renewal instructions have been provided to the Bank. However, this feature is not available under Canara Tax Saver Deposit Scheme, Capital Gains Scheme and Non-callable Term Deposits.
The overdue term deposit feature ensures that your fixed deposit amount does not get renewed and stays with the Bank after the maturity date. Such matured fixed deposits are treated as an overdue term deposit from the maturity date. An interest rate, equivalent to the prevailing savings bank rate, will be paid for the overdue period. The overdue period refers to the period between the FD maturity date and date of payment or reinvestment. This feature can is applicable in case the depositor does not opt for automatic deposit renewal option.
The Canara Bank also allows non-resident Indians or NRIs to start a fixed deposit account with them. The Bank provides them with three types of fixed deposits options. Take a look:
The NRO (or Non-Resident Ordinary) Fixed Deposit account can be opened jointly by an NRI and an Indian resident. This type of account can be opened for a minimum of 15 days to a maximum of 10 years. The deposit should be made in Indian rupees only. The interest on an NRO deposit is equivalent to the applicable Canara Bank FD rates for domestic deposits. Moreover, the loan and nomination facility is available under this type of FD.
The NRE (or Non-Resident External Rupees) Fixed Deposit account can be opened by an NRI along with any close relative staying in India. This type of account can be opened for a minimum of 1 year to a maximum of 10 years. The deposit should be made with Indian rupees only. The interest is paid as per the applicable Canara Bank FD rates for NRE deposits. Moreover, the interest amount earned under this FD is exempted from tax deductions. This deposit also allows for a loan as well as the nomination facility.
The FCNR (or Foreign Currency Non-Resident) Fixed Deposit account can be opened jointly by NRIs only. This type of account can be opened with international currencies, such as USD, CAD, EURO, AUD and GBP for a minimum deposit period of 1 year to a maximum of 5 years. The interest is paid as per the applicable Canara Bank FD rates for FCNR deposits. Moreover, the interest amount earned under this FD is exempted from tax deductions. This deposit also allows for loan and nomination facility.
Canara Bank provides tax exemption benefits* on their Fixed Deposit and Kamadhenu deposits with a lock-in period of minimum 5 years. The tax exemption limit is up to Rs 1.5 lakhs under the purview of the Sec. 80 C.
The tax levied on fixed deposits doesn’t depend on the tenure of your fixed deposits. It is based on the income tax bracket you fall into.
10% TDS is applicable if the interest earned on your deposits is more than Rs 40,000 in case of the general public and Rs 50,000 in case of senior citizens. Upon deduction, a TDS certificate will be given by the Bank.
*Tax benefit is subject to changes in tax laws
In case you opt for premature closure of your fixed deposits, then the rate of interest applicable on your FD will be 1% lesser than the original rate. However, the penalty on premature closure can be changed by the Bank.
The Regular Fixed Deposit Scheme of Canara Bank should be opted by people who simply want to invest their savings to earn a handsome interest with negligible risks. Anybody, including senior citizens, can start this FD as it requires only Rs 1000 to invest. This is also ideal for minors as the investment can be made in their name.
The Canara Tax Saver Deposit Scheme should be opted by people who want to claim tax deductions under the Income Tax Act. It is best suited for people with regular salaries, tax-paying professionals and businessmen. However, only people who do not plan to withdraw the amount before 5 years should invest as it comes with a lock-in period of 5 years.
The Canara Kamdhenu Deposit Scheme should be opted by people who want to continue earning interest with minimal risks on the investment over a long period of time. It is ideal for people with regular income who also have savings of their own.
The Canara Ashraya Deposit Scheme should be opted by senior citizens who wish to earn additional interest on the deposited amount. People with both regular FD and Kamdhenu deposit can apply for this scheme.
The following individuals and groups are eligible to open a Canara Bank fixed deposit account-
Canara Bank provides loan up to 90% against fixed deposits. However, you will not get a loan against a Canara Bank FD in another bank.
The tenure of the loan is restricted up to the tenure of the FD.
The rate of interest for regular FDs ranges between 3 and 5.40 per cent and for senior citizens the interest rate is somewhere between 3.50 and 5.90 per cent for deposits lesser than Rs 2 crore.
According to the latest revision, Canara Bank has slashed the interest rate of FDs with a maturity period of one year by 5 basis points (bp). Thus, customers will now get an interest rate of 5.20 per cent for one-year fixed deposits.
However, the FD rate has been hiked for deposits with a maturity period of two years to 10 years. As a result, customers will now earn an FD rate of 5.40 per cent for deposits maturing between two years to three years. Similarly, the Bank will now offer an interest of 5.50 per cent to customers with an FD tenure of three years to 10 years.
As per the new Canara Bank FD rates, FDs maturing between 7 days to 45 days and 46 days to 90 days will earn an interest of 2.95 per cent and 3.90 per cent respectively. The Bank will offer an FD rate of 4 per cent to deposits with a maturity period of 91 days to 179 days.
Canara Bank customers will earn an interest rate of 4.45 per cent on fixed deposits maturing between 180 days to below one year. On the other hand, fixed deposits with a maturity tenure of more than one year and below two years will earn an FD rate of 5.20 per cent.
Senior citizens, who have fixed deposits in Canara Bank, will get an additional rate of 0.50 basis points on FD tenures of 180 days to 10 years. Thus, Canara Bank will offer an interest rate of 2.95 per cent to 6 per cent on fixed deposits held by senior citizens.