Recurring Deposit Interest Rates at Himachal Pradesh Gramin Bank (as on 30 Mar 2021). An account in which the investor must deposit a pre-determined sum at regular intervals (usually monthly instalments) for a long period of time.
Public sector banks, private sector banks, cooperative banks, international banks, and regional rural banks all sell bank RDs. You are expected to invest in pre-determined daily installments (usually monthly). Banks provide a variety of tenures with varying interest rates that you can choose from based on your needs. Interest rates are measured on a quarterly basis rather than monthly, and the maturity amount is taxed.
Himachal Pradesh Gramin Bank RD Interest Rates
| Maturity Period | Interest Rate (p.a.) |
|---|---|
| Year 1 | 6.40% |
| Year 2 | 6.30% |
| Year 3 | 6.25% |
| Year 4 | 6.25% |
| Year 5 | 6.25% |
Tax Implication on Recurring Deposit (RD)
Taxability of Interest Earned
Interest gained is taxable depending on the account holder’s tax bracket, so he or she will have to pay tax on it. Profit is taxable under the “Benefit from Other Sources” heading.
Applicability of TDS
On total interest gained up to Rs. 10,000, no TDS will be deducted. TDS of 10% is deducted if the cumulative interest received in a financial year reaches Rs 10,000. Any additional TDS may be claimed for a refund. Previously, there was no TDS on RD, but that changed on June 1, 2015, when TDS on RD became applicable under Section 194A.
More Rate of TDS
TDS of 20% is rendered if you do not have a valid PAN or if you do not have the PAN details to the bank/post office.
Avoiding TDS
If the RD account holder does not have taxable income, he or she can escape TDS by sending Form 15G/ Form 15H to the bank/post office where the RD account was opened. Form 15G is for people under the age of 60, and Form 15H is similar to Form 15G but only for people over the age of 60. (senior citizens).
FAQs
✅ Can I deposit different monthly installments in RD account?
Answer: No, you cannot deposit different monthly installments in a regular RD account. However, some banks offer Flexi RD which allows customers can deposit any amount at any point in the tenure with no requirement to make deposits every month.
✅ Will TDS be made on RD interest?
Answer: If the interest earned on RD is up to Rs 10,000, no TDS will be made. If it exceeds the limit of Rs 10,000 then a TDS at 10% will be made. If your income is non-taxable, then you can submit Form 15G (for non-senior citizens)/ Form 15H (for senior citizens) in order to avoid deduction of TDS.
✅ What is the duration of the RD account?
Answer: Usually banks offer RDs of the duration from 6 months to 120 months (10 years). Some of the banks offer RD of 240 months also.