Union Bank of India RD Interest Rates

Union Bank of India is a public sector bank in India with more than 120 million customers. The bank has 9500 branches (more than 9300 branches in India), and it is one of the largest public sector banks in India. It merged with Andhra Bank and Corporation Bank in 2020, and since then, it has been one of India's most significant public sector banks.

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Recurring Deposit, abbreviated as RD, is an investment method for people with consistent incomes. A fixed amount of money is to be deposited every month into the RD account of an individual for a definite tenure. A person can earn an RD rate of interest on a scale of about 2.50% to 8.50%. 

Union Bank of India RD Interest Rates 2022 Table

S.No Tenure RD Rates For Senior Citizens RD Rates For General Citizens
1 181 days to 364 days 4.40% 4.40%
2 One year 5% 5%
3 One Year to Two years 5.1% 5.1%
4 Two Years to Three years 5.3% 5.8%
5 Three Years to Five years 5.40% 5.4%
6 Five years to Ten years 5.50% 5.50%

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

Union Bank of India RDs has interest rates ranging from 4.4% to 5.5% for six months to 10 years. For senior citizens, too, the rates lie in the same range.

Features of Union Bank Interest Rates

  • Minimum monthly installments starting from Rs. 50.

  • The account holder can choose the tenure between 6 months and 120 months (multiples of 1 month). 

  • The number of installments is unchangeable, although it may be converted into a Term Deposit. This must be done before maturity. 

  • Interest rates at acceptable levels are compounded quarterly. 

  • TDS will be applied to the interest fraction of the cumulative deposit.

  • The amount will be handed out a month after the last installment upon maturity of the deposit. 

  • Nominee facilities are also provided, abiding by the bank guidelines. 

  • They also offer a penalty-free premature closure.

  • There is no automatic renewal system. 

Types of Union Bank of India RD Schemes

  1. Cumulative Deposit Scheme

    This scheme grants small investors to save via easy monthly installments over a fixed period. 

    Tenure 6 months to 10 years
    Minimum Deposit amount INR 50
    Maximum Deposit amount No upper limit
    Penalty for late installments No penalty for any delay in installments or non-deposit of any month's installment
    Nomination Facility Provided
    Premature closure Offered, however, eligible for penalty if any
    Auto-Renewal Not allowed
    Tax Deducted at Source (TDS)  Applicable
    Loan Facility Available
  2. Union Monthly Plus

    This scheme is a variable deposit scheme providing a step-up and a step-down option with monthly installments. 

    The depositors must set forth a core amount while opening their account and deposit it as the initial installment. 

    This allows the account holder even to deposit multiple times per month. And the maximum permissible amount deposited per month is ten times the initial installment or INR 1,00,000 (the lower one between the two).

    • Step Up Option: It allows increasing, in other words, 'Step Up' the monthly installment up to ten times the core amount. For example, if the initial installment was INR 1,000, the step-up option allows depositing up to INR 10,000 in a particular month at a maximum.

    • Step Down Option: Even after stepping up for any given month, the depositor may reduce or precisely 'Step Down' in the successive month. Remember that the deposited amount does not recede from the core amount. 

How to Open a Recurring Deposit Account in Union Bank of India?

A person can open a Union Bank recurring deposit account offline or online. 

In the offline method of starting an RD account, the person has to visit the branch of Union Bank of India nearest to them.

The other way is the online mode of opening an account, where a person has to go through the online net banking methods of Union Bank.

You need to follow the simple procedure listed below to open an RD account online:

  • Log into the net banking account with the help of login credentials.

  • Select the E-recurring Deposit option from the menu 

  • Fill up the form provided, which mentions RD amount, tenure, etc., and a checkbox for senior citizens to avail of higher interest rates. 

  • After submitting, you'll have your RD account ready and will automatically get credited on the due date by Union Bank. 

Eligibility Criteria for Union Bank RD Account

One needs to be eligible to avail of these interests on investments in Union Bank of India. The criteria for eligibility of having an RD account are listed as follows:

  • Any person, which includes even minors and joint accounts

  • Non-Resident Indians (NRIs) 

  • Illiterate people

  • Blind people

  • Corporations

  • Trusts

  • Hindu Undivided Families (HUF) 

  • Companies

  • Partnership firms

Documents Required for Opening RD Account in Union Bank

The necessary documents for opening a recurring deposits account are:

Any government ID proof

(Which includes an Aadhar card, voter ID, Driver's license, or Permanent Account Number) 

Valid Address Documentation

(Passport, Aadhar, Government Bills, Driving Licence, or Bank statement with cheque) 

Premature Withdrawal

As already mentioned, Union Bank permits account holders to withdraw their deposits anytime they want, which will be completely free of any penalty.

FAQ's

  • Does the Union bank permit the change of nominee for the Recurring Deposit account? 

    Ans: Yes, if the account holder wishes to change the nominee's name for the Recurring Deposit account, they are allowed to do so by the bank. You need to contact the bank to know the possible steps.
  • Is a minor eligible for this kind of account? 

    A2) Yes, Union Bank allows minors to open an account, provided that it is strictly under the guardianship of an adult. 
  • Is TDS applicable to the interest income by RDs? 

    A3) Yes, TDS is applicable accordingly. Tax deductions are a part of every recurring account. The rates, however, depend on the amount and time tenure of the amount deposited.
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