Formerly, known as the Development Credit Bank, DCB Bank has a network of 334 branches spread across 19 states and 3 union territories in the country. The financial institution is essentially a new generation private sector bank and offers several popular financial products including, fixed deposits.
In fact, the fixed deposit scheme offered by DCB is considered to be one of the popular deposit schemes at present. The attractive DCB interest rates coupled with the scheme’s features, make it an efficient savings option for those who intend to earn substantial returns.
In this article
- Factors Influencing DCB FD Interest Rates
- DCB FD Interest Rates
- DCB Fixed Deposit Eligibility
- Types of DCB Fixed Deposit Scheme
- How is Interest Calculated on DCB FD?
- TDS on DCB Fixed Deposit
Factors Influencing DCB FD Interest Rates
The rate of interest offered on FD is subject to change and is affected by a number of internal and external factors.
Following are few such factors which tend to affect the DCB FD interest rates significantly –
- Fixed deposit tenure: Opting for a fixed deposit scheme for a longer tenure is considered to be more profitable than an FD short term FD scheme. It is mainly because a longer tenure attracts a higher interest rate.
- Deposit amount: The interest amount is directly proportional to the deposit value. Typically, a higher deposit value attracts a higher rate of interest.
- Age of depositor: The rate of interest also depends on the age of the depositor. For instance, the rate of interest provided to senior citizens and regular FD holders tend to differ, wherein the former is more likely to receive a higher rate.
- The frequency at which FD interest is compounded: When the frequency of compounding period is increased, the maturity value also increases. It magnifies the impact of a given rate of interest significantly.
- RBI policies and economic condition: Most directives issued by RBI tend to influence the rate of interest provided on deposits. Similarly, the prevailing economic conditions of a country are also decisive factors. Even the slightest change in the Cash Reserve Ratio and repo rate tends to influence the rate of interest of most fixed deposits.
DCB FD Interest Rates
It must be noted that the DCB bank fixed deposit rate for a regular FD account held by a resident Indian may vary from that of an NRI.
This table below illustrates the DCB bank FD rates 2020 for regular fixed deposit accounts for resident Indians.
|Fixed Deposit Tenure||DCB FD rates||DCB FD interest rates for senior citizen|
|7 days to 14 days||5%||5.5%|
|15 days to 45 days||5.3%||5.8%|
|46 days to 90 days||5.5%||6%|
|91 days to less than 180 days||6%||6.5%|
|180 days to less than 365 days||6.6%||7.1%|
|366 days to less than 455 days||6.9%||7.4%|
|455 days to less than 1 year and 9 months||7%||7.5%|
|1 year and 9 months||7.25%||7.75%|
|More than 1 year and 9 months to less than 3 years||7.20%||7.70%|
|3 years to 5 years||7.35%||7.85%|
|More than 5 years to 10 years||7.35%||7.85%|
The said DCB FD interest rates apply to a single deposit which is less than Rs.2 crore. Also, the exact rate of interest is often determined based on the date on which the financial institution received the deposit amount.
DCB Fixed Deposit Eligibility
Any individual who meets one or more of these following criteria is deemed eligible to open a fixed deposit account with DCB.
- Resident Individuals (for sole or joint deposit account)
- Private and public limited companies
Other than these, individuals may be required to fulfil additional criteria to open a fixed deposit account with DCB.
Types of DCB Fixed Deposit Scheme
The financial institution provides different types of fixed deposit schemes.
1. DCB Fixed Deposit scheme
One can open an FD account under this scheme with a minimum deposit of Rs.10000. The major features of the FD scheme are as follow –
- Its tenure ranges between 7 years and 10 years.
- The interest accrued on the deposit amount is usually paid out monthly, quarterly, half-yearly or annually. The interest pay-out is largely based on the prevailing DCB bank fixed deposit rate and tenure.
- It extends the overdraft/loan facility against a fixed deposit. Individuals can avail up to 80% of the deposit amount as loan value.
- It also comes with an auto-renewal facility.
2. DCB Suraksha FD scheme
This particular fixed deposit scheme offers free life insurance benefits to the deposit holder’s family. The said insurance cover is equivalent to their deposit value. Here are some of the main features of the FD scheme –
- It comes with a 3-year tenure.
- This scheme can be availed for Rs.10000.
- The life insurance coverage can be availed by account holders between the age of 18 years and 54 years.
- Deposit holders can avail an insurance cover of up to Rs.50 lakh.
3. DCB Tax Saver Fixed Deposit Scheme
As the name suggests, this deposit scheme comes with tax-saving benefits. For instance, under this scheme, deposit holders are entitled to avail tax deduction of maximum Rs.1.5 lakh under Section 80C of the Income Tax Act, 1961.
Besides tax-saving benefits, it also comes with these following features –
- The FD scheme comes with a fixed tenure of 5 years.
- The minimum amount required to open a DCB tax saver FD account is Rs.10000, while the maximum amount is Rs.1.5 lakh.
- Interest paid depends on the prevailing DCB bank fixed deposit rate for the given tenure.
- Interest is either compounded quarterly or is paid out quarterly.
- This FD scheme does not provide loans against FD facility.
4. DCB Zippi Online FD scheme
The prominent features accompanying this FD scheme are as follow –
- An FD account under this scheme can be opened online.
- It comes with deposit tenure of a minimum of 14 days and a maximum of 10 years.
- A minimum of Rs.10000 and a maximum Rs.10 lakh can be deposited per transaction.
- The scheme does not require individuals to open DCB savings account because the maturity value, including the interest amount, is credited to FD holders’ account.
5. DCB Bank Diamond Khushiyali Deposit Scheme
The said FD scheme accepts a monthly deposit amount from FD account holders and extended lump sum value at maturity. Notably, the minimum deposit value for this scheme is Rs.500. Other prominent features include –
- Its tenure ranges between 1 year and 10 years.
- There is no penalty on missing out on a monthly deposit.
- The interest rate on this FD depends on the prevailing rates as on maturity or closure.
- Deposit holders can avail up to 90% of the deposit value as the loan amount.
How is Interest Calculated on DCB FD?
Individuals can easily calculate the compounding interest on their RD by using the formula mentioned below –
A = P (1 + r/n) ^ nt
In this formula,
- A equals to Maturity Value
- P equals to Principal amount
- r equals to Annual interest rate
- n equals to Compounding frequency
- t equals to Tenure
Example: Armaan opens a fixed deposit account with Rs.1 lakh for 90 days at the rate of 5.5% interest compounding quarterly. Using the compound interest formula,
A = P (1 + r/n) ^ nt
= 100000 (1+0.05/4) ^ 4*1
The total maturity amount is Rs.101356, and the interest accrued on the same is Rs.1356.
TDS on DCB Fixed Deposit
Interest earned on deposit accounts is subjected to taxation. In a situation when the interest earned by an individual on all deposit accounts exceeds Rs.40000 in a financial year, a TDS at the rate of 10% is imposed by the bank on the depositor’s returns. In case of senior citizens, the exemption limit is Rs.50000.
Nonetheless, individuals claim tax exemption on their deposit amount while filing their yearly ITR by submitting a Form 15G and Form 15H.
For Form 15G
- Residing Indians below the age of 60 years.
- An individual or HUF.
- The tax computed on total income is zero.
- In a financial year, the tax amount should be less than the basic exemption limit for the given year.
For Form 15H
- Residing individuals who are minimum 60 years of age.
- The taxable amount on the total income is zero.
With such knowledge about FD schemes and the DCB Bank interest rate on FD at their disposal, individuals can make an informed decision about their investment choices more effectively.