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.
In this article
- BOB RD Interest Rates 2021 for Different Investment Periods*
- Special Features & Benefits of BOB Recurring Deposit Interest Rates
- Premature Withdrawal Facility of Bank of Baroda RD
- How to Calculate BOB RD Interest?
- Bank of Baroda Recurring Deposit Scheme Eligibility criteria
- Bank of Baroda RD Tax Benefits
- Documents Required to Open Bank of Baroda RD Account
- Term-Wise Bank of Baroda RD Interest Rates
- Recurring Deposit Schemes offered by Bank of Baroda
- How to Open an RD Account at BOB?
- Interesting takeaways from Bank of Baroda Recurring Deposit Rates
- Bank of Baroda RD Rates – FAQs
BOB RD Interest Rates 2021 for Different Investment Periods*
|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 interest rates mentioned here are for deposits less than Rs. 2 crores.
Special Features & Benefits of BOB Recurring Deposit Interest Rates
- One can apply loan and avail 95% of the RD amount
- Any family member or spouse of the investor can be nominated to receive the final amount.
- The deposit tenure ranges from as low as 6 months to 10 years (120 months)
- TDS deductions will be charged as per the existing income tax rules at the time of opening of the RD account
- One can make minimum deposits in multiples of Rs 100
- One can go to any Bank of Baroda branch to avail the facilities
- Quarterly and half-yearly RD facilities are also available under their schemes
Premature Withdrawal Facility of Bank of Baroda RD
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. Partial withdrawal facility is not available.
How to Calculate BOB RD Interest?
The formula used to calculate RD interest rate 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 Recurring Deposit Scheme Eligibility criteria
- To open an RD account, one must be a citizen of India or a HUF (Hindu Undivided Families)
- An NRI can also opt for BOB RD account through NRO (Non-Resident Ordinary Account) and NRE (Non-Resident External Account) accounts
- A minor can also get an RD account opened in the bank of Baroda given that his/her parents will supervise the finances under their guardianship
Bank of Baroda RD Tax Benefits
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.
Terms and Conditions for submitting Form 15G
- One must be an individual or HUF
- Only Resident Indians can apply
- Age should be less than 60 years
- Tax calculated on your total income must be zero
- The total income from interests or the year should be less than the minimum exempt income for that year, which is Rs 2.5 lakh for FY 2020-21 (AY 2021-22)
Documents Required to Open Bank of Baroda RD Account
- PAN card
- Voter ID card
- Driving License
- Government ID card
- Photo ration card
- Senior citizen ID card
- Telephone bill
- Electricity bill
- Bank statement with cheque
- Certificate /ID card issued by the post office.
Term-Wise Bank of Baroda RD Interest Rates
Short-Term Bank of Baroda RD rates: Recurring deposit accounts opened for a short period of time can fetch an interest between 5.50% to 6.25%. The time span of short term RDs ranges from 180 days to less than a year.
Medium-Term Bank of Baroda RD Interest rates: A medium-term BOB R account can offer a rate of interest in the range of 6.45%-6.60% p.a. The tenure ranges from 1 year to 5 years.
Long-Term Bank of Baroda Interest Rates: A long-term account helps to fetch interest of 6.45% p.a. Any tenure exceeding 5 years is counted as a long-term tenure.
Recurring Deposit Schemes offered by Bank of Baroda
Bank of Baroda offers various Recurring Deposit schemes in which one can make an investment, viz.
Yatha Shakti Jama Yojna (Flexible recurring deposit scheme)
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.
Baroda Holiday Saving recurring Deposits
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.
Regular Income cum recurring Deposit
The minimum deposit under this RD scheme is Rs. 1000 and 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.
How to Open an RD Account at BOB?
Opening a recurring deposit account with 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 instalment 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.
Interesting takeaways from Bank of Baroda Recurring Deposit Rates
- Bank of Baroda offers great RD interest rates up to 5.75%
- Bank of Baroda interest rate on RD is compounded quarterly.
- Bank of Baroda accepts minimum deposits starting from as low as Rs. 50.
- RD interest rates up to 6.90% are offered for senior citizens
It is evident from BOB Recurring deposit interest rates that one of the best and risk-free investments is Recurring Deposit in India. Not to mention, additional features like loan facility, quarterly and half-yearly RD facilities, minimum deposits and others contribute to make 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.
Bank of Baroda RD Rates – FAQs
Ques. Who is eligible to apply for an RD account?
Ans. 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.
Ques. Does BOB allow partial withdrawal of RD accounts?
Ans. Bank of Baroda doesn’t allow Partial withdrawal of recurring deposit.
Ques. What happens when the RD account matures?
Ans. 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.
Ques. Is nomination facility provided by Bank of Baroda RD account?
Ans. Yes, 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.