Allahabad Bank was established in 1865 with its headquarters in Allahabad, Uttar Pradesh. On 30th August 2019, the Ministry of Finance announced that the bank would be merged with the Indian Bank. The latter acquired Allahabad Bank on 1st April 2020 to become the 7th largest public sector bank in the country.
Allahabad Bank (currently, Indian Bank) offers several options to customers with regard to its fixed deposit schemes. These deposits are available for all types of customers, even minors, against attractive Allahabad Bank FD rates, alongside short- to long-term lock-in periods. Depositors also enjoy the facility to withdraw prematurely (against a penalty fee) and avail a loan against their FD account.
In this article
- Factors that Influence Allahabad Bank FD Rates
- Allahabad Bank FD Interest Rates
- Allahabad Bank Fixed Deposit Eligibility
- Types of Allahabad Bank Fixed Deposits
- How to Calculate Allahabad Bank FD Interest Rates?
- TDS on Allahabad Bank FD
Factors that Influence Allahabad Bank FD Rates
There are several factors that play a pivotal role in determining the interest rates for Allahabad Bank’s FD scheme. These include –
- Tenure of the deposit – Customers who opt for a longer tenure receive a higher rate of interest and vice versa.
- Recession – A recession can lead to the RBI lowering its repo rate. Reduction in this rate will also reduce the interest rates on loans. As a result, banks will also lower the interest on all deposits, including FDs.
- Inflation – Inflation has the opposite effect as a recession. In these times, loans become expensive as the repo rate increases. This also causes the banks to offer more interest on deposits.
Apart from these, factors like the depositor’s age, alongside the country’s general economic condition also play important roles in determining the interest rates offered by the bank to an individual.
Allahabad Bank FD Interest Rates
As of 2020, the current Allahabad Bank FD rates are as follows –
|Tenure||Interest Rates||Interest Rates for Senior Citizens|
|7 days to 14 days||3.05%||3.55%|
|15 days to 29 days||3.25%||3.75%|
|30 days to 45 days||3.25%||3.75%|
|46 days to 90 days||3.25%||3.75%|
|91 days to 180 days||4.00%||4.50%|
|181 days to 269 days||4.50%||5.00%|
|270 days to 364 days||4.50%||5.00%|
|1 year 1 day to 1 year 11 months 29 days||5.40%||5.90%|
|2 years to 2 years 11 months 29 days||5.40%||5.90%|
|3 years to 4 years 11 months 29 days||5.40%||5.90%|
|5 years to 10 years||5.40%||5.90%|
One must remember that the above-given interest rates are subject to change. That is why, before making a deposit, an individual should check through the bank’s current interest rate offerings to make informed financial planning.
Allahabad Bank Fixed Deposit Eligibility
Individuals belonging to any of the following categories can opt for an FD account with Allahabad Bank –
- Resident Indians
- Non-resident Indians (NRIs)
- Senior citizens
- Minors (only for specific products)
- Hindu Undivided Families (HUFs)
Apart from complying with the eligibility of belonging to any of the above categories, individuals must also submit a few required documents to start a fixed deposit account with Allahabad Bank.
Types of Allahabad Bank Fixed Deposits
Allahabad Bank (as Indian Bank) currently offers the following types of FD schemes –
IB Tax Saver Scheme
As the name suggests, the IB Tax Saver Scheme is a tax-saver fixed deposit with a minimum tenure of 5 years.
Some of its features are –
- Income tax exemptions of up to Rs.1.5 lakh under Section 80C.
- Interest pay-out can be monthly, quarterly, or after maturity.
- Maximum deposit period is 10 years.
- The minimum amount that can be deposited is Rs.1,000 and in multiples of Rs.100 thereof. Ceiling is Rs.1.5 Lakh.
- Customers will not be able to withdraw from or close the account before maturity.
- The facility of loan against the deposit amount is not available.
Money Multiplier Deposit
Features of the Money Multiplier Deposit offered by Allahabad Bank are as follows –
- Interest pay-out per quarter.
- Minimum tenure is 6 months while the maximum is 10 years.
- Minimum amount that one can deposit is Rs.1,000 and in multiples of Rs.100 thereof with no ceiling.
- Availability of auto-renewal facility.
- Loan against the deposit available.
- Customers will be able to withdraw prematurely from the account.
Short Term Deposits
Short Term Deposits from Allahabad Bank are fixed deposits that can be started by minors, individuals, more than two persons, and firms or companies.
Salient features of this scheme include –
- Tenure ranging between 7 days and up to 180 days.
- An additional interest of 1% for existing Allahabad Bank staff.
- An additional interest of 1.50% for senior citizen ex-employees of Allahabad Bank.
- Minimum deposit amount is Rs.1,000 and in multiples of Rs.100 thereof. There is no maximum deposit amount.
- Interest pay-out after maturity.
- Customers will be able to withdraw prematurely.
- Facility for a loan against the deposit available.
- Auto-renewal facilities are available only up to 10 years.
Standard Fixed Deposits
Standard fixed deposits offered by Allahabad bank have features like –
- The minimum amount that can be deposited is Rs.1,000 while there is no upper limit (only for standard fixed deposits).
- Interest can be earned after maturity, monthly, or quarterly as per the customer’s preference.
- Customers will be able to avail a loan against their deposits (subject to the product type).
- Auto-renewal facilities are available.
- Depositors can enjoy the facility of premature withdrawal with a few FD options.
- Facility to nominate another individual.
The Allahabad Bank FD interest rates 2020 listed in the beginning will be applicable to all of the products mentioned above.
How to Calculate Allahabad Bank FD Interest Rates?
The formula for calculating Allahabad Bank fixed deposit interest rates is given by –
A = P (1 + r / n) ^ nt
- A = Maturity amount
- P = Initial deposit amount
- r = Annualised interest rate
- n = Number of times the interest is compounded per year (4 for quarterly, 2 for half-yearly, and 12 for monthly)
- t = Tenure in years
Example: Raj creates a fixed deposit with Rs.1 lakh for 10 years. The rate of interest he will receive as per the above table is 5.40%.
As per the formula,
- P = Rs. 1 Lakh
- r = 5.40%
- n = 4
- t = 10
A = 100000 (1 + 0.054/4) ^ 4 x 10
A = Rs.170,980 (approx.)
Instead of undertaking the cumbersome manual calculation for FD returns, individuals can use an Allahabad Bank FD calculator to check their earnings from the deposit. They will only have to enter the parameters like the deposit amount, lock-in period, and applicable Allahabad Bank FD rates to find the interest earned and calculate the total amount after maturity.
Using a fixed deposit calculator is a quick and convenient way to find the FD earnings. This online tool can also help an individual decide how much he/she wants to deposit and for how long to achieve future financial goals.
TDS on Allahabad Bank FD
TDS will be applicable on Allahabad Bank FDs as per the current terms. A 10% tax will be deducted if the total interest earned by an individual amount to Rs.40,000 or above in a financial year. For senior citizens, this threshold is Rs.50,000.
FD depositors can, however, avoid TDS by submitting Form 15G or 15H. To do so, they have to comply with a few conditions –
For Form 15G
- Income earned must not be taxable.
- He/she must be resident individuals or HUFs below the age of 60.
For Form 15H
- Income generated from any source must not be taxable as per tax slabs of senior citizens.
- He/she must be resident individuals or HUFs above the age of 60.
Individuals looking to invest in such an FD must ensure that they are informed about the current Allahabad Bank fixed deposit rates, as well as other information pertaining to the scheme, to ensure that they make an informed investment decision.