On 30th August 2019, as per an announcement made by the Ministry of Finance, Allahabad Bank merged with the Indian Bank. The merger was completed on 1st April 2020 with Allahabad Bank becoming an anchor bank. This merger resulted in Indian Bank becoming the 7th largest nationalized bank in the country.
Currently, all products and services of Allahabad Bank are offered through Indian Bank. Recurring deposits or RDs are one of them, wherein customers can deposit a fixed sum periodically to receive lucrative returns. The Allahabad Bank RD interest rates are some of the highest rates offered under such schemes by banks across the country.
|Tenure||RD Rates for General Citizens||RD Rates for Senior Citizens|
|181 days – 269 days||4.45%||4.95%|
|270 days – 364 days||4.45%||4.95%|
|1 year 1 day – 1 year 11 months 29 days||5.15%||5.65%|
|2 years – 2 years 11 months 29 days||5.15%||5.65%|
|3 years – 4 years 11 months 29 days||5.15%||5.65%|
|5 years – 10 years||5.15%||5.65%|
Currently, the following types of RDs are offered by Allahabad Bank (as Indian Bank) –
The Variable Recurring Deposit from Allahabad Bank provides the option of making variable deposits each month. Meaning, an account holder can deposit as much as he/she wishes to according to the minimum and maximum deposit amount.
Some of the features of the Variable Recurring Deposit are –
The IB Swarna Nidhi Recurring Deposit enables account holders to purchase a gold coin after maturity. Customers will be able to avail a discount of Rs.25 per gram on their purchase. They will also be eligible for a personal accident insurance policy of up to Rs.1 Lakh if the maturity amount is Rs.12,000 or more.
Few features of the IB Swarna Nidhi Recurring Deposit are mentioned below –
Standard recurring deposits from Allahabad Bank have the following features –
The lender allows the account holders the option of premature withdrawal of money but a nominal amount of penalty may be charged based on the scheme chosen. 1% penal interest is charged if the amount deposited is less than Rs 1 crore. In case the amount deposited is more than Rs 1 crore then a penal interest of 4% would be charged. However, the partial withdrawal option is not allowed.
The interest at Allahabad Bank RD is compounded at each quarter. The formula used for calculation of the maturity value is –
A= P x (1+R/N) ^ (Nt)
A – Maturity Amount.
P – Recurring Deposit installment
N – Number of times the interest is compounded.
R – Rate of Interest
t – the tenure
For example, Mr. Peter, who lives in Goa and is below 60 years of age opens an RD account with the Allahabad Bank with an amount of Rs 10000 for 5 years. The applicable interest rate for him is 5.15%. In that case, the total interest amount towards the end of the maturity period will be Rs. 85,201, and his total maturity amount will be Rs. 6,85,201.
Entities belonging to the following categories can open an RD account with Allahabad Bank:
Apart from belonging to these categories, individuals will also have to submit a few documents to start a recurring deposit with Allahabad Bank.
A recurring bank account with Allahabad Bank can be opened with any one of the following:
There are several factors that can contribute to the increase or decrease of interest rates offered by Allahabad Bank for its FD scheme. Some of the factors are as follows –
Apart from these, the age of an individual is also an important determinant of the bank’s FD rates, wherein senior citizens can enjoy higher returns.
The RD interest rate of Allahabad Bank can be calculated using a recurring deposit calculator. With this online tool, users only have to enter the monthly investment amount, lock-in period (in years), and the applicable Allahabad Bank RD interest rates.
This tool computes the total amount that a depositor will receive after maturity. Additionally, it not only enables an individual to calculate their returns but also aids to create an investment portfolio.
The applicability of TDS on recurring deposits is the same as FDs. A TDS of 10% will be applied if the total interest earned by an individual from all of his/her investments in a year is Rs.40,000 or above. In the case of senior citizens, the limit is Rs.50,000.
Account-holders, however, have the option to save TDS by submitting Form 15G or 15H. However, they must meet a few conditions –
In the case of Form 15G
In the case of Form 15H
Even though the Allahabad Bank RD rates are attractive, depositors may come across a few disadvantages. One such drawback is the applicability of penalty charges in case of a delayed payment of instalment for regular RDs. Individuals should, thus, check and consider all the limitations before opting for an RD scheme with the bank.
Allahabad Bank or Indian Bank customers can open their RD by going with the online method – Internet Banking. They must have an active internet banking account and credentials so that they can open an account online directly linked to the savings/current account. Those who don’t have an account with Indian Bank can approach the nearest branch with all the required documents to open an account.
Ques. Who can apply for an Allahabad Bank RD account?
Ans. Indian residents and Hindu Undivided Families (HUF) can open an RD account with Allahabad Banking.
Ques. Does Allahabad Bank allow partial withdrawal of RD accounts?
Ans. No, Partial withdrawal of recurring deposit is not permissible.
Ques. Is the nomination facility provided by the Allahabad Bank RD account?
Ans. Yes, nomination facility is provided on Allahabad recurring deposit. However, only one nominee per account is allowed.
Ques. What happens when the Allahabad Bank RD account matures?
Ans. Upon maturity, the total invested amount and the accumulated interest can be transferred directly into the linked savings account or current account by asking the Bank. However, there is an option of investing the maturity amount in fixed deposits.
Ques. Is TDS deducted if I submit form 15G/15H?
Ans. No, TDS won’t be deducted if you submit form 15G/15H as applicable.