Indian Bank RD Interest Rates

Indian Bank is a government-certified financial service provider based in Chennai. Its recent merge with Allahabad Bank vaulted it into one of the largest composite banks in India. It provides various services to its customers, including the recurring deposit facility. Indian Bank Recurring Deposit is one of the best RD schemes for a beginner investor to invest in.

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Below are the latest details regarding this scheme, including its features, rate, and eligibility criteria.

Indian Bank RD Interest Rate 2022 Table

Tenure The interest rate for general citizen The interest rate for senior citizen
180 days  4.00% 4.50%
181- 269 days 4.00% 4.50%
270 days - 364 days  4.40% 4.90%
365 days 5.00% 5.50%
366 days- 729 days 4.95% 5.45%
730 days - 1094 days 5.10% 5.60%
1094 days  5.25% 5.70%

Disclaimer: RD Interest rates are subject to change with time. Policybazaar does not endorse, rate, or recommend any particular company or product. The investment risk in the investment portfolio is borne by the policyholder. 

Features of Indian Bank RD Scheme 2022:

  • A minimum deposit amount of only Rs.25 is required to open an account.

  • The account tenure can range from 6 months to a year.

  • Interest rates as high as 5.25% p.a. are available to customers with Indian Bank RD.

  • Additional life insurance coverage is also provided.

  • Any family member or spouse can receive the final maturity amount through a nomination facility imparted by the bank.

  • You can open an RD account at your convenience by visiting the branch of Indian Bank closest to you.

Types of Indian Bank RD Accounts

  1. Variable Recurring Deposit

    This scheme allows you to change the amount in the monthly installments at will. A minimum amount of Rs.25 is required to open such an account, while the maximum amount is Rs.1 lakh. The most significant advantage of this scheme is that there is no penalty imposed on the account owner in case the monthly deposits are not paid in time. 

  2. Insured Recurring Deposit

    This RD scheme provides life insurance cover on top of the total interest earned on your investment. A minimum deposit amount of Rs.100 is required to open such an account for a tenure ranging from 3 to 5 years.

How to Open an RD Account with Indian Bank? 

For customers without any existing account with the Indian Bank, a new Indian Bank savings account is required. It is simple and quick to open a savings account, which is then linked to your RD account. A bank representative at your local Indian Bank branch can assist you with the procedures mentioned above. 

Tax Benefits of Owning an RD Account

If the interest earned in the RD account across all branches of Indian Bank exceeds Rs.40,000 for a financial year for a regular customer, the bank will waive the income tax at a source. For senior citizens, the limit is Rs.50,000. The former TDS applied was 10%. However, due to the pandemic, there has been a reduction in the TDS rate to 7.5%.

 *Tax benefits are subject to changes in tax laws.

Eligibility Criteria to Open an Indian Bank RD

 The following can open an RD account with Indian Bank:

  • Permanent residents of India

  • Senior citizens

  • Minors

  • Hindu Undivided Families (HUFs)

Documentation Required for Opening an Indian Bank RD Account:

  • Application form provided by the bank 

  • Identity Proof (any)

  • Address Proof (any)

  • Two passport-size photographs of the applicant

  • Copies of PAN Card or Form 60/61 (in case PAN Card is unavailable)

  • Other documents (as and when required by the bank according to the applicant's profile)

Premature Withdrawal of RD 

Usually, a choice of premature withdrawal is provided to the customer, i.e. breaking the RD before it is fully mature. However, the initial interest might get hindered depending on how early the RD is broken from the actual maturity date. Your interest rate might get reduced. 

Indian Bank provides the option of premature withdrawal. But, in that case, the interest accumulated on the principal amount will differ (depending on the bank rules.) Partial withdrawal of money is not allowed.

FAQ's

  • How is the interest calculated according to the Variable Recurring Deposit Scheme?

    A1) Under the Variable Recurring Deposit Scheme, interest is calculated and paid on the minimum amount between the 10th and the last day of the month.
  • How to open a Recurring Deposit account at Indian Bank?

    A2) At Indian Bank, a recurring deposit amount can be opened online and offline.
    One needs to have active net banking as a pre-existing customer to open an account online. With the credentials provided, log into the net-banking service. There will be an option for opening a Recurring Deposit account on the Menu bar. Please select it and submit all the required documents. Once your documents are verified successfully, you will be able to open a Recurring Deposit account. Following that, you can settle on a deposit amount and tenure. 
    For the offline method, you can approach the nearest local branch of Indian Bank. A bank representative will inform you about the necessary documents and help you with the opening procedure of a recurring deposit account. 
  • What is the interest rate for senior citizens provided by Indian Bank RD?

    A3) Many attractive interest rates are available for senior citizens under the Indian Bank RD. For customers falling in the senior citizen category, an additional 0.5% interest rate is offered on top of the current rate.
  • Is there any penalty if I delay payment under the Variable RD scheme?

    A4) The bank charges no penalty in case of delayed payment under the Variable RD scheme.
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