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Union Bank Fixed Deposit (FD)

Union Bank of India (UBI) is one of the largest government-owned banking institutions in India, Founded in 1919. The Indian government owns 90% of Union Bank shares. Amongst approximately 4,300 branches of the bank, four are situated abroad in Antwerp, Dubai, Sydney and Hong Kong.

The bank is all set to merge with Andhra Bank and Corporation Bank in 2020.

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Aside to the standard savings account, Union Bank is also popular amongst its consumers due to its multiple fixed deposit investment options. Union Bank fixed deposit plans provide better returns on investment when compared to standard savings account deposits.

Union Bank FD Rates

A short-term Union Bank FD plan (maturity ranging from 7 days to 365 days) offers interest in the range of 5.00% to 6.15% per annum. For senior citizens, this range is between 5.50% and 6.65% per year.

For FD schemes with maturities ranging from 5 to 10 years, the rate of interest is relatively higher. For regular investors, the rate is 6.30% per annum, while for senior citizens, this rate is 6.80% per annum.

TenureNon-senior citizen and NRO FD (%)Senior Citizen FD (%)
7-45 days5.00%5.50%
46-90 days5.50%6.00%
3-4 months6.00%6.50%
4-12 months6.25%6.75%
1-3 years6.40%
3-10 years6.45%6.95%

Types of Union Bank FD Schemes

  1. Short Deposit Receipt – Tenure for such Union Bank of India fixed deposit schemes range between 7 days and 179 days. Minimum deposit amount is Rs. 5 Lakh.
  2. Union Bank of India Fixed Deposit Receipt – The maturity period ranges between 7 days and 10 years. Customers can start with initial investments of just Rs. 10,000.
  3. Union Bank of India Monthly Income Scheme – With this Union Bank FD plan, investors can pick a maturity term between 6 months and 120 months. Interest is payable at the start of each month.
  4. Union Bank of India Deposit Reinvestment Certificate – Another long-term scheme, investors who pick this FD need to keep the money invested for at least 6 months. The maximum tenure is 10 years. The minimum investment sum is Rs. 500 in the urban regions and Rs. 100 for semi-urban or rural areas.
  5. Union Bank of India Tax Saver Deposit – This FD scheme allows for tax-saving on yearly income allocated towards investment schemes. The minimum investment for this FD is Rs. 5,000, while the maximum amount is Rs. 1.5 lakh. This scheme has a lock-in period of 5 years. Keep in mind, no premature withdrawal or loan facility is available on such tax-saving fixed deposit instruments.
  6. Motor Accident Claims Annuity (Term) Deposit Account (MACAD) – As the name suggests, this is a motor accident claim settlement investment scheme, wherein victims are eligible for higher interest earnings on fixed deposits. The minimum deposit is Rs. 1,000 while the maturity period ranges between 36 and 120 months.
  7. Non-callable Term Deposit Scheme – This is a high-valued investment instrument, with a minimum deposit of Rs. 1 Crore. Tenure ranges between 61 days and three years.
  8. Cumulative Deposit Scheme – It is a monthly investment scheme, with minimum deposits of Rs. 50. The tenure ranges between 6 months and 120 months. Investors can select a sub-category of Union Bank FD investment under this scheme. Choices include Deposit Reinvestment Certificate, Short Term Deposit Receipt and Fixed Deposit Receipt.

Benefits of Choosing Union Bank FD

Investors looking for the perfect FD plan should consider the schemes offered by UBI. Here are some advantages of depositing with this bank.

  • Union Bank FD allows investors to nominate their spouse or child as the beneficiary for the investment.
  • The bank offers attractive rates of interest on the total investment amount.
  • Loan against FD facilities are available.
  • Premature withdrawal is valid for most schemes.
  • Substantial interest hikes are offered to senior citizen investors.

Eligibility Criteria for Union Bank FD

Any individual belonging to any of the following groups are eligible to open a fixed deposit account with Union Bank.

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  • Residential Indians, holding an individual or joint account
  • Minors with co-signing adults
  • Members of Hindu undivided family or HUF
  • Societies, clubs and associations
  • Agencies and institutions
  • NRIs
  • public and private limited companies

However, keep in mind that tax saving FD schemes are only available to an individual or joint account holders. Agencies or corporations cannot invest through these plans.

Documents Required for Union Bank FD

Interested investors need to furnish valid identity and address proof before opening a Union Bank of India FD account.

  • Proof of Identity (Any One)
  • PAN card
  • Passport
  • Aadhaar card
  • Driving license
  • Ration card with photo
  • Voter ID
  • Senior citizen identification when applicable
  • Proof of Address (Any One)
  • Electricity bill
  • Telephone bill
  • Aadhaar card
  • Bank statement including cheque
  • Post Office issued certificate

Premature Withdrawal Terms and Conditions

Premature withdrawal is the removal of the deposited sum from an FD account before maturity. Union Bank allows investors to withdraw their investment midway in most cases. However, withdrawing before maturity results in lower interest pay-outs and penalty charges in certain cases.

Remember that premature withdrawal facility is unavailable for tax saving FD schemes.

Special Forms to Fill

Individuals having an interest income of less than Rs. 40,000 (Rs. 50,000 for senior citizens) are eligible for TDs waivers.

Those eligible for tax rebates on their FD earnings, need to fill up Form 15G and Form 15H (senior citizens) while filing their yearly Income Taxes.

Loan against Union Bank FD

Union Bank of India FD allows investors to opt for a loan against the deposited sum. They can avail a credit valued at 90% of the FDs total worth. Interest rates applicable on such loans range between 6% and 7.45%.

FAQs

  • What is the highest FD rate for Union Bank FDs?

An investor aged below 60 years can earn interest at rates of 6.45% per annum.

  • What is the tenure range for Union Bank FDs?

Union Bank fixed deposit schemes have a maturity period ranging between 7 days and 10 years.

  • Can investors avail credit cards against FDs?

Yes. If an investor lacks proper, IT returns and PAN card details, he/she can avail credit cards from UBI against their FDs.

  • Does UBI offer increased FD interest rate to senior citizen investors?

Yes. Senior citizens are liable to earn interest at rates between 5.50% and 6.80% per annum.

  • Can investors change the tenure for an existing FD?

No. Once the FD investment scheme is active, the tenure cannot be altered. However, closing the current FD investment and opening a new one with the preferred tenure is always possible.

  • Who is eligible for Union Bank FDs?

Residents, including HUF members, joint account holders, firms, agencies, clubs, etc. are eligible for such investments.

  • Which forms to submit to avail tax discounts on FD earnings?

Investors eligible for TDS rebate on their investment must fill up and submit Form 15G or Form 15H (senior citizens) while filing their taxes.

  • Is nomination facility available on Union Bank fixed deposit?

Yes. Investors can nominate their spouse, children or other family members when investing in a Union Bank FD.

  • What is the maximum loan against FD an investor can avail on their investment?

Investors can avail up to 90% of their FD value as a loan against the deposit.

  • What is the interest rate on UBI loan against FD?

The interest rate on such a loan varies. It is generally between 6.00% and 7.45%.