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.
In this article
- Allahabad Bank RD Interest Rates for 2021
- Allahabad Bank RD Rates – Special Features
- Types of Allahabad Bank Recurring Deposits
- Allahabad RD Premature Withdrawal Rules
- How to Calculate Allahabad Bank RD Interest?
- Allahabad Bank Recurring Deposit Eligibility
- Documents Required
- Factors that Influence Allahabad Bank RD Interest Rates
- TDS on Allahabad Bank Recurring Deposit
- How to Open an RD with Allahabad Bank?
- Allahabad Bank RD – FAQs
Allahabad Bank RD Interest Rates for 2021
|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%|
Allahabad Bank RD Rates – Special Features
- There is no cap on minimum and maximum amount deposited for a normal RD account
- The deposit tenure ranges from 6 months to 120 months (10 years)
- One can visit any nearest Allahabad Bank branch to avail RD account opening service
- TDS (Tax Deducted at Source) deductions are subject to the existing income tax rules as at the account opening
- Penalty charged on non-payment of the periodic deposit is Rs. 2 for every unpaid Rs.100/- per month for deposits of five years and below
- Loan facility is available at attractive terms and rates
- Nomination facility is available at Allahabad Bank RD
Types of Allahabad Bank Recurring Deposits
Currently, the following types of RDs are offered by Allahabad Bank (as Indian Bank) –
Variable Recurring Deposit
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 –
- Lock-in period of 36 months.
- The initial deposit amount that has to be made is of Rs.500.
- The monthly deposit can be made in multiples of Rs.100 with the maximum amount being Rs.1 Lakh.
- Interest is paid on or after the 10th of every month.
- No penalty fee is applicable on delayed payment of instalments.
- The account can be foreclosed against a penalty charge.
IB Swarna Nidhi Recurring Deposit
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 –
- Tenure ranges between 6 months and 12 months.
- The initial amount to be deposited is of Rs.500.
- Minimum monthly instalment is in multiple of Rs.100 with a maximum limit of Rs.1 lakh.
Standard recurring deposits
Standard recurring deposits from Allahabad Bank have the following features –
- The minimum monthly deposit is set at Rs.100 (differs with RD types) and in multiples thereof. There is no upper limit for deposits.
- The minimum lock-in period is 6 months, while the maximum is 10 years.
- The interest in Allahabad Bank recurring deposit is compounded every quarter.
- Customers will be able to foreclose the account before maturity.
- A facility for a loan against the deposit is available.
- Deposit holders can nominate another individual.
Allahabad RD Premature Withdrawal Rules
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.
How to Calculate Allahabad Bank RD Interest?
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.
Allahabad Bank Recurring Deposit Eligibility
Entities belonging to the following categories can open an RD account with Allahabad Bank:
- Hindu Undivided Families
- Non-resident Indians (NRIs)
- Minors (under a guardian/parent)
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:
- Identity proof (any 1)
- PAN card
- Voter ID card
- Driving License
- Government ID card
- Photo ration card
- Senior citizen ID card
- Address Proof (any 1)
- Telephone bill
- Electricity bill
- Bank statement with cheque
- Certificate /ID card issued by post office
Factors that Influence Allahabad Bank RD Interest Rates
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 –
- Inflation – During inflation, the RBI will increase the repo rate, which, in turn, will increase the lending rates of banks. Thus, borrowers will be paying more on their loans. As a result, banks will offer higher deposit rates to customers.
- Downturn – In case of a downturn or recession, the RBI reduces the repo rates. As a result, loans become cheaper with lower lending rates. Thus, banks also lower the interest rates on deposits.
- Deposit tenure – One of the factors that influence RD rates and which depositors can control is tenure. Longer tenures generally offer higher interest rates and vice versa.
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.
Allahabad Bank RD Calculator
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.
TDS on Allahabad Bank Recurring Deposit
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
- Should be resident individuals or HUFs below the age of 60.
- Income earned is not taxable.
In the case of Form 15H
- He/she should be resident individuals or HUFs above the age of 60.
- Income earned, if any, must not be taxable as per tax slabs of senior citizens.
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.
How to Open an RD with Allahabad 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.
Allahabad Bank RD – FAQs
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.