Union Bank of India RD Interest Rates

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      Union Bank of India RD Interest Rates

      Union Bank of India bagged the prestigious Indian Banks’ Association (IBA) award under the category of “The best IT Risk Management & Cyber Security Initiatives – Large Bank”. The award was conferred to the Union Bank of India during IBA’s 16th Annual IBA Technology Awards-2021 event held virtually in Mumbai.

      Union Bank of India RD Interest Rates

      Union Bank of India Recurring Deposit Features

      There are many features associated with the Recurring Deposit of Union Bank of India. Following are some important among them-

      • A nomination facility is available
      • No penalty in case of premature withdrawal of deposit amount
      • No penalty for delayed payments of installments
      • The deposit tenure ranges from 6 months to 120 months
      • Visit any Union Bank of India branch to avail of this service
      • TDS deductions are subject to the existing income tax rules as at the time of opening the RD account

      Union Bank of India RD Interest Rates 2021

      Tenure General Rates
      Senior Citizen Rates
      1 year to 1 year 364 days 5.00% 6%
      2 years to 2 years 364 days 5.10% 5.60%
      3 years to 4 years 364 days 5% 5.80%
      5 years to 10 years 5.40% 6.20%

      Types of Union Bank of India Recurring Deposit Schemes

      There are a variety of deposit schemes existing in the financial system. Based on the tenure for which they are valid, they can be categorized into the following segmentations-

      Based on the tenure Union Bank of India Recurring Deposit can be classified into three types, these are:

      Short-Term RD

      Under this type of Union Bank of India Recurring Deposit, your deposit’s tenure ranges between 6 months to 3 years. Such RD is best suited for those who are looking to develop the habit of savings. 

      Medium-Term RD

      When you are not willing to commit for the long tenure and are not sure how much benefit you can get from RD, then opting for a medium-term recurring deposit is a good decision. It provides the right balance of flexibility and commitment to invest so that you can assess its benefits. The tenure ranges from 3 years to 7 years.

      Long-Term RD

      The long-term RD is best suited when you want to earn the return on your investment but do not have the lump sum amount to invest in a fixed deposit. By investing in recurring deposits you get the flexibility of making monthly investments and earn a return similar to FD. The tenure ranges from 7 years to 10 years.

      Documents required to open Recurring Deposit Account in Union Bank of India

      Identity Proof Address Proof
      Passport Passport
      PAN card Telephone bill
      Voter ID card Electricity bill
      Driving license
      Bank Statement with Cheque
      Government ID card
      Certificate/ ID card issued by Union Bank of India
      Photo ration card
      Senior citizen ID card

      Union Bank of India Recurring Deposit Rates – Premature Withdrawal

      The amount can only be withdrawn on maturity. In case of an emergency, you can break your RD before maturity, but after that, your account will be closed. Banks may deduct a 1 or 2 percent penalty from the interest accrued on your RD amount for the period for which the amount was with the bank.

      The minimum lock-in period is 3 months and if the depositor requests a premature withdrawal before that, he earns zero interest and only the principal amount will be refunded to him. Apart from canceled interest, any incentives offered are also withdrawn.

      Calculation of Union Bank of India Recurring Deposit Interest Rates

      Some factors affect the calculation of interest rates. Following are some of them- 

      • Policies Framed by RBI: The change in Cash Reserve Ratio (CRR) and repo rate as directed by the RBI affect the interest rate of all banking instruments including the recurring deposit.
      • Recession – In times of recession, RBI releases funds in the market and hence injecting liquidity in the market. As a result of high liquidity and low credit demand, banks reduce the rates on RD.
      • Inflation – Inflation has a positive effect on a fixed deposit interest rate. Hence, RD rates tend to be higher in a period of rising inflation.
      • Current State of Economy – In a booming economy, people take larger credit to meet their personal and business requirements. In periods of high credit demand, banks offer a higher interest rate to garner more funds through recurring deposits.

      RD Account Opening Process at Union Bank of India

      Following methodologies should be added to open a Recurring Deposit account in a leading banking institution in the country-

      • Approach the banking institution with an account-opening form
        • Two passport size photographs
        • Address and identity proof such as the Aadhaar card, passport, PAN (permanent account number) card or declaration in Form 60 or 61 as per the Income Tax Act, 1961, driving license, voter’s identity card or ration card.
      • Carry original identity proof for verification at the time of account opening. Physical Verification is a very important step in the account opening process. 
      • Choose a nominee and get a witness signature to complete the formalities and get started. After obtaining the requisite signature your account becomes valid and active.

      Nomination Facility on Union Bank of India RD

      Nomination facility is available in Union Bank of India recurring deposits. Whether you open it in a single name or joint name, only one nominee per account is permissible. You should ensure that the nomination is followed as per RBI rules. You can change the nominee through declaration in appropriate form.

      Tax Benefits on Union Bank of India Recurring Deposit

      No tax exemption is allowed on RDs. These are subject to TDS (tax deducted at source) for an interest income exceeding ₹ 10,000. Tax deductions are maximized by the depositors to avail the benefits offered through investment analysis. Therefore tax deduction is an important consideration.

      Union Bank of India News Snippets

      Union Bank Of India bags prestigious IBA award

      Union Bank received this recognition for its efforts for implementing best security practices and IT risk management across the enterprise-wide network and digital channels. The Bank has a complete network of 9590+ branches and 13280+ ATMs across India. The bank has been bringing awareness about Cyber Security amongst Customers also because the Staff members through various media and knowledge building exercises.

      Union Bank of India Recurring Deposit Interest Rates – FAQs

      What Is The Eligibility For Opening An RD Account?

      Indian residents and HUF (Hindu Undivided Families) can open RD accounts. NRIs can also open the RD account through NRO and NRE accounts.

      Banks provide RD schemes for minors as well, under the guardianship of parents to supervise their finances.

      What Is The Eligibility For Opening An RD Account?

      Indian residents and HUF (Hindu Undivided Families) can open RD accounts. NRIs can also open the RD account through NRO and NRE accounts.

      Banks provide RD schemes for minors as well, under the guardianship of parents to supervise their finances.

      What Is The General Tenure/Duration Of Union Bank Of India Recurring Deposits?

      Union Bank of India RD can be opened for a minimum of 6 months to maximum tenure of 120 months.

      What Exactly Happens On Maturity Of RD Account?

      On maturity of your RD account, you can ask the bank to transfer the principal amount and the accumulated interest component directly into your linked savings account. You can also invest your RD amount in fixed deposits after maturity.

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