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Kotak Mahindra Bank, with its headquarters in Mumbai, is the second-largest private bank in India in terms of market capitalisation, as of April 2019. The banking company is an eminent financial service provider, and one of the most preferred destinations for fixed depositors in India.

Kotak Mahindra Bank FD rates are one of the most lucrative ones in the current Indian economy. That’s part of the reason why Kotak Bank fixed deposit makes for an excellent avenue to mobilise funds for individuals with a low-risk tolerance.

Factors Influencing Kotak Bank FD Rates

Interest rates are the most critical part of fixed deposits, apart from the security it provides to depositors. These rates depend primarily on the following factors:

  • Age of the depositor – Individuals above the age of 60 years, i.e. senior citizens are eligible for a higher rate of interest on their deposits compared to general citizens.
  • Repo rate – This rate is set by the Reserve Bank of India’s Monetary Policy Committee. The apex bank provides overnight loans to the banks. The higher the repo rate, the higher are the FD rates offered by banks and vice versa.
  • Reverse repo rate – This is the rate at which RBI avails loans from banks. Similar to the repo rate, it is also directly proportional to FD rates.
  • Tenure of deposit – Kotak FD rates also vary based on the tenure for which an individual locks in their deposit.
  • Deposit amount – Lastly, the deposit amount also influences Kotak Bank FD rates.

Kotak Mahindra Bank FD Rates

The following table illustrates the Kotak FD interest rates, as of 22nd June 2020 for domestic, NRE Account, and NRO accounts through which premature withdrawal is allowed. Note that this table only shows the rates for deposits below Rs.2 crore.

Maturity periodRegular accountSenior citizen account
7 to 14 days2.75%3.25%
15 to 30 days3%3.5%
31 – 45 days3%3.5%
46 to 90 days3.5%4%
91 to 120 days4.1%4.6%
121 to 179 days4.1%4.6%
180 days4.5%5%
181 to 269 days4.75%5.25%
270 days4.75%5.25%
271 to 363 days4.75%5.25%
364 days4.75%5.25%
365 to 389 days5.15%5.65%
12 months 25 days5.25%5.75%
391 days to less than 23 months5.25%5.75%
1 day less than 24 months or 2 years5.15%5.65%
2 years to less than 4 years4.9%5.4%
4 years to 1 day less than 5 years4.75%5.25%
5 years to 10 years4.5%5%

The following table demonstrates the Kotak Bank FD rates for similar accounts, i.e. where premature withdrawal is allowed, but with deposits higher than Rs.2 crore, as of 22nd June 2020.

Maturity periodDeposits of Rs.2 crore and above but below Rs.5 croreDeposits of Rs.5 crore and above but below Rs.10 croreDeposits of Rs.10 crore and above but below Rs.25 croreDeposits of Rs.25 crore and above
7 to 30 days2.5%2.5%2.5%2.5%
31 to 90 days3%3%3%3%
91 to 179 days3.5%3.5%3.5%3.5%
180 days4%4%4%4%
181 days to 270 days4.4%4.4%4.4%4.4%
271 days to 279 days2.9%2.9%2.9%2.9%
280 days to less than a year4.4%4.4%4.4%4.4%
12 months to less than 2 years4.75%4.75%4.75%4.75%
2 years to 7 years4.5%4.5%4.5%4.5%

The table shown below illustrates the interest rates for accounts where premature withdrawal is not allowed, as of 22nd June 2020.

Maturity period Deposits of Rs.2 crore and above but less than Rs.5 croreDeposits of Rs.5 crore and above but less than Rs.10 croreDeposits of Rs.10 crore and above but less than Rs.25 croreDeposits of Rs.25 crore and above
91 to 120 daysNil3.35%3.35%3.35%
121 to 179 daysNil3.85%3.85%3.85%
180 daysNil4.1%4.1%4.1%
181 to 270 days4.5%4.5%4.5%4.5%
271 to 279 days3%3%3%3%
280 days to less than 1 year4.5%4.5%4.5%4.5%
12 months to less than 15 months4.85%4.6%4.6%4.6%
15 months to less than 18 months4.85%4.6%4.6%4.6%
18 months to less than 24 months or 2 years4.85%4.6%4.6%4.6%
2 years to less than 3 years4.6%4.6%4.6%4.6%

It is crucial to remember that the above Kotak Fixed Deposit interest rates are subject to change from time to time. Depositors must, therefore, ensure that they are up to date with the current rates offered by the bank to propagate better financial planning.

Kotak Mahindra Bank Eligibility 

Individuals belonging to the following categories are eligible to open a Kotak Bank fixed deposit account:

  • Regular Indian national
  • NRI
  • Member of HUF
  • Senior citizens

Types of Kotak Mahindra Bank Fixed Deposits

Kotak Mahindra Bank proffers its customers the four types of fixed deposit accounts mentioned below:

  • Cumulative FD – In this type of account, the interest is compounded periodically, and the depositor receives the entire amount at the end of the maturity period.
  • Quarterly payout FD – Interest is calculated quarterly and disbursed at the end of each quarter in this FD account type.
  • Monthly payout FD – Individuals receive the interest sum at the end of each month by choosing a monthly payout FD account.
  • Short-term FD – Individuals can utilise this account type to keep their deposits locked in for a period of 7 to 180 days.

How to Calculate Kotak Fixed Deposit Interest?

In order to calculate FD interest for accounts with a maturity period above 181 days, Kotak Mahindra Bank utilises the following formula:

A = P (1 + r / n) nt

Here,

  • A = Maturity amount
  • P = Principal amount
  • r = Rate of interest
  • n = frequency of compounding of interest
  • t = maturity period

Example: Mr Arijit, who is 65 years of age, opened a cumulative FD account (premature withdrawal allowed) with Kotak Mahindra Bank. He deposited Rs.50 lakh for a maturity period of 3 years.

As per the rates offered by the bank, he would earn a Kotak Mahindra Bank interest rate of 5.4% on his deposits. The amount he will receive at the end of 3 years is calculated below.

A = 5000000 (1 + 0.054 / 4) 3 x 4

Or, A = Rs. 58,72,932

TDS on Kotak Mahindra Bank FD Interest

If the interest an individual earns from all his/her deposit accounts in a particular year is equal to or more than Rs.40,000 then it is subject to 10% taxation. For senior citizens, the threshold is Rs.50,000. Typically, this taxation happens under the purview of the designated bank. However, general citizens and senior citizens can submit Form 15G and 15H respectively to prevent tax deduction at source and instead pay the tax themselves when they file their IT returns.

To submit these forms, one must, however, satisfy certain criteria. For instance,

For Form 15G –

  • One has to be a member of HUF or a resident individual below the age of 60 years.
  • His/her income earned must not be taxable.

For Form 15H –

  • One has to be a resident individual or a member of HUF above 60 years of age.
  • His/her total income generated during the particular FY must not be taxable.

These are a few information that individuals interest to start an FD account with Kotak Mahindra bank must be aware of without fail. Kotak Bank FD rates, particularly are an important part of the entire process that individuals follow up with, to implement proper financial planning.

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