Canara Bank Recurring Deposit (RD) is a term deposit scheme in which one can save a fixed part of the savings on a monthly basis. Headquartered in Bengaluru, Canara Bank is one of the oldest public sector banks in the country owned by the Government of India. Moreover, being one of the oldest banks, Canara bank RD interest rates are on par with other major banks with an added advantage of minimum deposits starting from as low as Rs. 50. Let’s delve a bit deeper into Canara Bank’s recurring deposit interest rates.
Canara Bank RD Rates
Given below is the updated Canara Bank RD Rates in a tabulated form.
|Term of the Deposit||RD Interest Rates (% p.a.)||Senior Citizen RD Interest Rates (% p.a.)|
|7 days – 14 days||5.75||6.25|
|15 days – 30 days||5.75||6.25|
|31 days – 45 days||5.75||6.25|
|46 days – 60 days||6||6.5|
|61 days – 90 days||6||6.5|
|91 days – 120 days||6||6.5|
|121 days – 179 days||6||6.5|
|180 days – 269 days||6||6.5|
|270 days – less than 1 year||6.2||6.7|
|1 year only||6.75||7.25|
|Above 1 year – less than 2 years||6.7||7.2|
|2 years and more– less than 3 years||6.7||7.2|
|3 years and more– less than 5 years||6.6||7.1|
|5 years and more– less than 8 years||6||6.5|
|8 years and more– 10 years||6||6.5|
Key Points of Canara Bank Recurring Deposit Interest Rates
- Canara Bank’s interest rates go up to 7.00%
- RD interest rates are compounded quarterly
- Canara bank accepts minimal deposit starting from as low as Rs.50
- The minimum amount can be deposited in the multiples of Rs. 50
- Senior Citizen can avail RD rates up to 7.50%
- Any member of the family or spouse can be nominated to receive the final amount.
- Loan facility up to 90% of the available accumulated balance is available
How is the Maturity Amount Calculated?
The maturity amount is the lumpsum amount which is provided after the required RD tenure is over. You can determine the interest you have earned with the help of this amount. An RD calculator immensely helps you in calculating the required interest. However, below given is the formula to calculate the interest on your deposit:
A = P*(1+R/N)^(Nt)
Where ‘R’ is the rate of interest, ‘P’ is the principal deposited, ‘n’ gives the tenure in months and ‘t’ is the applicable tenure.
Eligibility Criteria for Canara Bank Recurring Deposits
- Canara Bank RD account can be opened by any individual.
- An individual can also open a Canara Bank RD account with another person jointly. This account is called joint account.
- Minors are also eligible to open an RD account in Canara Bank under the supervision of a legal guardian.
- A Hindu Undivided Family (HUF) is also eligible for opening a recurring deposit account in Canara Bank.
- Proprietorship firms, companies, associations, trusts or institutions are also eligible to open an RD account as a group.
The deposit amount: A Canara bank RD account can be opened with as low as Rs. 50 for a fixed term without any cap on the maximum amount.
Tenure of Deposit: An RD account in Canara bank can be opened for a minimum time period of 6 months to a maximum of 10 years, in multiples of three.
Rate of Interest: Depending on the investment amount and the account term, Canara Bank compounds the interest in on a quarterly basis. However, individuals above 60 years get an additional 0.50% interest rate above the regular rates for individuals below 60 years of age.
Premature Withdrawal: Premature withdrawals are allowed but are subjected to a penalty of 1% rate if the account was opened on or after 4th February 2011.
Documents Required to Open a Canara Bank RD Account
- Bank’s prescribed application form
- Pand Card copies or Form 60/61 (in case you don’t have a pan)
- 2 passport size photos of the applicant
- Identity proof (any)
- Address Proof (any)
- Other documents (subject to applicant’s profile)
Canara Bank Recurring Deposit Tax Benefits
Canara bank recurring deposit is taxable under the Income Tax Act 1961. The money invested in RD is included in your yearly income and a TDS (Tax Deducted at Source) of 10% is levied on the interest earned (in case it is more 40,000 per year). To save TDS on your RD interest profit, you can fill either Form 15G or Form 15H.
Terms and Conditions for submitting Form 15G:
- Applicant 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 minimum exempt income for that year, which is Rs 2.5 lakh for FY 2019-20 (AY 2020-21)
Canara Bank Dhanvarsha Recurring Deposit Scheme
One of the best advantages Canara Bank provides is the Canara Dhanvarsha recurring deposit scheme which allows the customer to deposit more than the monthly preset amount. Under this scheme, the account holder has the option to invest surplus/bonus funds into their Canara Dhanvarsha account. These extra deposits made by the customer will in turn return even more additional interest over the regular interest on the required monthly deposits.
Canara Bank Dhanvarsha Recurring Deposit Scheme is available to residents as well as non-resident Indians. The Canara Bank Dhanvarsha RD account can be opened for a minimum of 1 year to a maximum of 10 years by making a minimum monthly deposit of Rs.10,000 to a maximum of Rs.1 lakh. This scheme does not provide senior citizens with any special interest rates. However, facilities such as nomination, loan facilities, and others are applicable in this scheme.
Benefits of Opening a Canara Bank RD Account
Recurring deposit is one of the best ways to invest and save your money with the lowest or zero risks included. Moreover, what could be a better idea than investing just a small amount of money every month and earning interest on it. It plays a major role in achieving whatever financial goals you have set for yourself. Apart from the conventional benefits that most of the RDs offer, Canara bank recurring deposit will offer you the with additional benefits such as:
- Minimal low deposit amount (as low as Rs 50). Moreover, there is no cap on the maximum deposit amount making it an ideal investment method for individuals who have big savings goals.
- As the Canara bank RD interest rates 2020 is compounded on a quarterly basis, it offers high returns even if one opts for a premature withdrawal.
- Canara Bank offers loan facility up to 90% of the deposited deposit balance
- The nominees can be modified anytime in under Canara Bank Recurring Deposit 2020
So, keeping all the points in mind, it is evident that going with a Canara Bank Recurring Deposit can benefit you and help you achieve your financial goals. However, it is recommended that you read all the terms and conditions meticulously before investing in any scheme.