The BOB recurring deposit is one of the most sought-after schemes offered by the bank in which customers can save a part of their monthly income and reap the benefits after a certain tenure. Founded by the Maharaja of Baroda, Maharaja Sayajirao Gaekwad III on 20 July 1908 and nationalized on 19 July 1969, Bank of Baroda has now become the third-largest public sector bank in India. The attractive BOB RD interest rates along with other surplus benefits make the choice of investing in BOB RD worthwhile.
|Tenure||Regular RD interest rates||Senior Citizen RD rates|
|181 days – 270 days||4.30%||4.80%|
|271 days – 364 days||4.40%||4.90%|
|1 year 1 day – 400 days||5.00%||5.50%|
|401 days – 2 years||5.00%||5.50%|
|2 years 1 day – 3 years||5.10%||5.60%|
|3 years 1 day – 5 years||5.25%||5.75%|
|5 years 1 day – 10 years||5.25%||5.75%|
*Note: The RD interest rates mentioned here are for deposits less than Rs. 2 crores.
The formula used to calculate RD interest rates is A = P(1+r/n) ^ nt, where ‘A’ is the final amount, ‘P’ is the principal amount, ‘r’ is the annual interest rate, ‘n’ represents the number of times that interest has been compounded and ‘t’ represents the tenure.
Note: You can calculate the interest earned on all the deposits using the Bank of Baroda RD Calculator.
Bank of Baroda and all other recurring deposits are taxable under the Income Tax Act 1961. The money you invest in RD is included in your annual income and a TDS (Tax Deducted at Source) of 10% is applicable on the earned interest, given that it should be more than Rs.40,000 per year (was Rs.10000 prior to FY 2019-20). To save TDS on your RD profit, you can fill either Form 15G or Form 15H.
|Identity proof||Address Proof|
Bank of Baroda provided the facility of premature withdrawal on their recurring deposits. There will be a 1% deduction on the applicable interest rate according to the RD scheme chosen in case the depositor decides to withdraw the deposited amount before the fixed tenure. A partial withdrawal facility is not available.
Beneficiaries for Bank of Baroda RDs can be nominated by depositors.
The bank’s web platform makes it simple and convenient to initiate and manage recurring deposit investments.
Bank of Baroda offers various Recurring Deposit schemes in which one can make an investment, viz.
Under this scheme, the bank Pays interest on a half-yearly basis. The account can be opened with an amount as low as Rs. 100 (minimum deposit) while the maximum deposit can be three times the core installment (maximum Rs. 10,000 per month). The tenure ranges from 12 months to 120 months (10 years). 95% of the outstanding amount in the RD account can be availed as a loan or overdraft facility. A 1% penalty from the applicable rate shall be levied in case of premature withdrawal.
The minimum monthly contribution is Rs.100 under this scheme and the minimum/maximum tenure is 12 months. Interest accumulated in the account is paid on a quarterly compounding interval. 1% of the applicable rate is charged as a penalty in case of premature withdrawal.
The minimum deposit under this RD scheme is Rs. 1000 and has a tenure range between 12 months to 120 months. Interest earned on the deposit is paid on a half-yearly basis and compounded quarterly. Under this scheme, no penalty is charged for premature withdrawal of deposits up to Rs. 5 lakhs given that the amount was with the bank for 12 months.
Opening a recurring deposit account with the Bank of Baroda is a hassle-free process. One can open an RD account with BOB both in an online and offline way.
Online method – This method can only be used if someone already has an active BOB internet banking account. To open an RD account, all you need to do is log in to net banking and select the option to open a new recurring deposit account. Once you select that, you need to fix the installment amount and select the tenure. Also, one needs to select the account to link to the RD account i.e. current account or savings account.
Offline method – To apply for the Bank of Baroda Recurring Deposit scheme offline, you have to fill up the application form. You can obtain this form either from your nearest BOB branch or access it online. Meet the eligibility and provide necessary documents along with the application form for RD account opening at the bank.
While account opening for all other RDs can be done through a unified application form, to open your flexible RD account with BOB, you will be required to fill the Yatha Shakti Jama Yojana application form.
It is evident from the BoB RD interest rate that one of the best and risk-free investments are Recurring Deposit in India. Not to mention, additional features like loan facility, quarterly and half-yearly RD facilities, minimum deposits, and others contribute to making it the best fit for people who want all the flexibilities entailed in Recurring Deposit Schemes. However, it is advisable to read all the terms and conditions before choosing a scheme.
Q1. Who is eligible to apply for an RD account?
Indian residents and Hindu Undivided Families (HUF) can open an RD account with the Bank of Baroda. NRIs can also open a BOB RD account through NRO and NRE accounts.
Q2. Does BOB allow partial withdrawal of RD accounts?
Bank of Baroda doesn’t allow Partial withdrawal of recurring deposits.
Q3. What happens when the RD account matures?
Once your RD account matures, the principal amount and the accumulated interest component can be transferred directly into your linked savings account. The RD amount can also be invested in fixed deposits after maturity.
Q4. Is the nomination facility provided by the Bank of Baroda RD account?
Yes, a nomination facility is provided on Bank of Baroda recurring deposits. Whether the RD is opened in a single name or joint name, only one nominee per account is allowed.
Q5. How is the penalty for late payments calculated?
Deposits made during the calendar month in which it is due are considered timely payments made by the bank. As a result, no punishment is imposed in this situation. Delaying payment until the next calendar month or later will result in a penalty of Rs.1 + GST for every Rs.100 per month. For the purposes of determining the penalty, a fraction of a month will be treated as a full month.