Recurring deposits are one of the best ways to save a small part of your money every month without burdening yourself. Bank of India Recurring Deposit interest rates can help you gain a substantial profit on your savings thus facilitating you to achieve the financial goals you have set. Bank of India provides its customers with the facility of recurring deposits which can be opened in the names of individuals or even minors (under the guardianship of their parents), two or more people (joint accounts), illiterates, and blind persons.
The interest rates provided by the Bank of India can help you save your hard-earned money in a systematic way and earn a profit on it over a period of time. Let’s have a quick look at the competitive RD interest rates provided by the bank:
|Tenure||Rates for General Citizens||Rates for Senior Citizens|
|180 days – 269 days||4.75%||5.25%|
|270 days – 364 days||4.75%||5.25%|
|1 year – 1 year 364 days||5.25%||5.75%|
|2 years – 2 years 364 days||5.30%||5.80%|
|3 years – 4 years 364 days||5.30%||5.80%|
|5 years – 7 years 364 days||5.30%||5.80%|
|8 years – 10 years||5.30%||5.80%|
The interest on the Bank of India 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 = Maturity Amount.
P = Recurring Deposit installment
N = Number of times the interest is compounded.
R = Rate of Interest
t = the tenure
For example, Mr. A, who lives in Delhi and is below 60 years of age, decides to open an RD account with the Bank of India with a deposit of Rs 500 for 5 years. Therefore, the applicable interest rate for him is 6.5%. In that case, his total interest amount at the end of the maturity period will be Rs 5498, and his total maturity amount will be Rs 35498.
The RD maturity amount you get is the sum of all the below-given parameters. Alternatively, one can also use the Bank of India RD interest calculator to check the interest earned on their deposit. The calculator asks for the values of the below-given factors:
Deposit Amount: The minimum deposit is the initial amount deposited by a customer in their account. The deposit amount for BOI RD starts from as low as 100 in rural and semi-urban branches and Rs. 500 in urban and metro branches.
BOI RD Interest Rates: Bank of India offers a higher rate of interest on recurring deposits with longer tenure and lower interest rates for an account opened for a shorter period. The highest interest rate offered by the bank is 6.75% for the deposit amount.
Deposit Tenure: As mentioned in the previous point, low-interest rates are offered for short tenure RDs and vice-versa.
Bank of India’s existing customers can simply open a BOI RD account with an online method – Internet Banking. All they need is an active internet banking account and then they can open an account online directly linked to the savings/current account. Those who don’t have an account with BOI can approach the nearest branch for instructions on opening an account. Carry all the mentioned documents while going to the bank.
The list for types of eligible individuals who can open a recurring deposit in BOI are mentioned below –
The following documents (any 1) are required for address proof –
The following documents (any 1) are required as identity proof –
If the account is closed within the first three months of opening, the bank will not provide any interest and the principal amount will be refunded to the source. If the deposit amount is withdrawn before maturity, a penalty is levied by the bank as per the norms and the accrued interest will be reduced for the last quarter as a result. Partial withdrawal of deposits is not allowed.
Due to the pandemic, TDS has been decreased from 10% to 7.5%, effective from May 2020 to March 2021. If your yearly income is less than the basic exemption limit, you can file Form 15G or Form 15H to request that the bank not deduct tax at the source.
Recurring Term Scheme: This system allows depositors, primarily those with fixed incomes, to save by depositing a preset sum of money every month for a set period of time. Quarterly compound interest is paid on deposits. The higher the interest rate, the longer the time.
Star Flexi-Recurring Deposit Scheme: This is a one-of-a-kind RD scheme that allows the depositor to choose the core installment amount as well as the monthly Flexi installments in multiples of the core installment. Individuals, HUFs, and minors are all eligible to open an account under this scheme. The minimum monthly installment amount in metro and urban branches is Rs.500, and Rs.100 in semi-urban and rural branches. The account’s duration can range from 12 months to 10 years in 3-month increments only.
Q1. What is the Penalty on Late Payments?
Bank of India charges a penalty if the monthly payment is not made on time. The bank charges Rs. 1.50 for every Rs. 100 per month for deposits of 5 years and less and Rs. 2 for every Rs. 100 per month.
Q2. Who can apply for a BOI RD account?
All Indian residents and Hindu Undivided Families (HUF) can open an RD account with the Bank of India.
Q3. When does the maturity happen for an RD deposit?
The maturity of the deposit is usually one month after the last installment or due date, whichever is later.
Q4. Is TDS applicable on recurring deposits?
As per the Finance Act,2015, recurring deposits will have an applicable TDS on the maturity amount.
Q5. What is the penalty structure for late payments?
The penalty structure for installments not paid within the specified time limit is as follows: