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Axis Bank RD – Eligibility Criteria, Features and Benefits
Axis Bank is one of the most sought after financial institutions in the country. It offers several financial products and services to from Recurring Deposits to Loans and Credit Cards, catering to a wide range of customers. Other offerings include savings account facilities, deposit facilities, FOREX services, investments facilities, etc.
Besides Savings Account and Fixed Deposits, the Axis Bank Recurring Deposit is another popular financial facility extended by the bank.
The Axis Bank RD is an initiative that allows individuals to enhance their savings by adopting a more systematic approach towards it.
Individuals who intend to invest in this RD scheme need to deposit a fixed amount in their Axis Bank RD account each month. Depending on the deposited amount and the period it has been invested for, a rate of interest is offered on it.
Even a person with limited means can avail the benefits of this RD scheme and mobilise their savings for greater returns.
Eligibility Criteria for Axis Bank RD
Individuals who would match the following criteria would be deemed eligible to open an Axis Bank RD account.
- Indian residents or Hindu Undivided Families.
- Minors whose RD account would be managed by their guardians.
An NRI can open an AXIS Bank RD account, but that has to be done through NRE or NRO accounts.
Features and associated benefits of Axis Bank Recurring Deposit
Individuals can benefit from the array of features of an Axis Bank Recurring Deposit.
Some of its most popular features and associated benefits are –
- Individuals can deposit as little as Rs. 500 in their Axis Bank RD account. The minimum deposit amount enables individuals with a limited income to partake in the healthy habit of savings. However, individuals can also invest more than the minimum amount, but the amount has to be multiple of Rs. 500.
- The tenure for the said scheme extends from 6 months to 10 years. Such extended tenure options allow investors who want to park their money for short-term or long-term requirements. The flexible tenure enables individuals to build a suitable corpus even with a limited contribution towards their RD account. It would help them to finance both their immediate and long-term financial goals.
- Individuals can withdraw prematurely from their Axis Bank RD account, but a penalty equivalent to 1% of the applicable interest has to be paid by them. Such a feature would help individuals to meet their financial crunch at a time of need. However, it should be noted that partial withdrawal from the RD is not applicable.
- In case of defaults, they would be deemed liable to pay a fine equivalent to Rs. 10 for every Rs. 1000 each month.
Axis Bank RD Interest Rates
The rate of interest offered on Axis Bank RD depends on the tenure, amount and scheme of RD chosen.
The table below offers an overview of the Axis Bank RD interest rate.
|tenure||Interest rates on regular RD||Interest rates for Senior Citizens|
|6 months – 8 months and 29 days||6.5%||7%|
|9 months to 11 months and 29 days||6.75%||7.25%|
|1 year – 1 year and 364 days||7%||7.5%|
|2 years – 10 years||6.75%||7.25%|
The interest offered on Axis Bank Recurring Deposit is compounded at each quarter.
The formula used for calculation of the maturity value is –
A= P x (1+R/N) ^ (Nt)
A is Maturity Amount.
P is Recurring Deposit.
N is Number of times the interest is compounded.
R is Rate of interest.
T is Tenure.
Here is an example of the same,
Ms. Zues deposits Rs. 500 each month for 9 months. The rate of interest applicable on her Axis Bank Recurring Deposit account is 6.5% (for regular RD). The sum on maturity would be –
A= P x (1+R/N)^(Nt)
= 4500 x (1+6.5/4)^(4×9/12)
= Rs. 4,623.
Hence, the interest income from the recurring deposit is Rs. 123.
Taxation of Axis Bank Recurring Deposit
Under the guidelines laid down by the Income Tax Act 1961, all Recurring Deposits are liable for taxation.
The proceeds earned by an individual would incur a TDS at the rate of 10% if the accrued interest exceeds Rs. 10,000 in a financial year. However, individuals who would not be able to furnish PAN would incur TDS at the rate of 20%.
However, individuals can protect their earnings against TDS by submitting a declaration under Section 197A. They can do so by filling a 15G or a 15H form, whichever is applicable in their case.
Individuals would require submitting these documents to open an Axis Bank RD account.
- Documents that serve as identity proof such as Aadhaar card, PAN card, Passport, driving license, ration card, etc.
- Documents that serve as an address proof, namely, passport, electricity bill, telephone bill, etc.
Individuals can apply for an Axis Bank Recurring Deposit –
- Via Internet Banking.
- Via Mobile Banking.
Individuals opting for the offline application would be required to visit their nearest branch to complete the formalities.
However, individuals applying through internet banking or mobile banking would have to access the official website of Axis Bank or the bank’s mobile app respectively and complete the formalities accordingly.
Investing in Axis Bank Recurring Deposit is a feasible way of building an emergency corpus for future and mobilising savings to fulfil financial goals. However, they are not very proficient when it comes to substantial wealth generation.
If an individual wishes to generate wealth and build a strong corpus easily over time, they can opt for other attractive options like Mutual Funds. These market-linked investment schemes offering higher returns than most other deposits. Apply for a Mutual Fund investment scheme which is best in tune with your financial requirements.