The DCB Bank is counted among the promptly emerging new generation commercial banks in the private sector. The financial institution, previously known as the Development Credit Bank, has over 334 branches across the country.
The financial institution offers its customers several profitable financial products and schemes, including recurring deposit schemes. Individuals can park a fixed amount periodically in their recurring deposit accounts to earn substantial returns. In fact, the DCB bank RD interest rates, considered to be among the high yielding deposit rates in present times, aids one to gather attractive interest on their deposited amount.
In this article
Factors Influencing DCB RD rates
Before finding more about the DCB Bank RD interest rates 2020, the following is a look at the factors which tend to influence the rate of interest of recurring deposits.
Some of the most prominent ones include –
- Deposit amount: Individuals who invest a relatively higher monthly deposit amount are more likely to avail a higher rate of interest.
- Deposit tenure: Higher deposit tenure often comes with a relatively higher rate of interest. This proves useful for those individuals who wish to grow their deposit amount substantially.
- Customer type: Usually, there are three types of customers, namely residing RD holders, senior citizens and non-residential Indians. The rate of interest offered to these customer types varies greatly from another. For instance, senior citizens are entitled to avail a higher rate of interest rate on their deposit than other two customer types.
- RBI policies: Changes in Cash Reserve Ratio (CRR) and repo rate tends to influence the rate of interest provided on recurring deposit rates. For instance, a decrease in the repo rate often lowers the interest rates of several financial products, including recurring deposit.
- Compounding frequency: The number of times interest is compounded on the deposited amount influences its maturity value. In turn, it helps to make the most of the available rate of interest to generate substantial income.
DCB RD Interest Rates 2020
This table below offers a fair idea about the DCB bank RD interest rates on a deposit of less than Rs.1 crore.
|Recurring Deposit Tenure||DCB RD interest rates||DCB RD interest rates for senior citizens|
|91 days to 180 days||5.75%||5.75%|
|181 days to 269 days||6%||6%|
|270 days to less than a year||6.1%||6.1%|
|1 year to 1 year 3 months||6.3%||6.3%|
|1 year 3 months to less than 2 years||6.3%||6.3%|
|2 years to less than 4 years||6.5%||6.5%|
DCB Recurring Deposit Eligibility
Individuals who meet these following criteria can open a DCB Recurring Deposit account –
- Residents Indians below 60 years of age.
- NRIs who hold an NRI account with DCB Bank.
- Senior citizens
- Members of HUF
To avail a better insight about case-specific eligibility criteria, individuals should get in touch with the representatives of the financial institution.
Types of DCB Recurring Deposit Schemes
The financial institution offers the following types of RD schemes –
- DCB NRE Recurring Deposit
These following highlight the major features of DCB NRE Recurring Deposit.
- The scheme can be opened with a minimum deposit amount of Rs.500.
- It comes with a minimum of 1 year and a maximum of 10 years’ tenure.
- Both principal and interest amount are exempted from income tax.
- DCB Diamond Khushiyali Deposit
The said RD plan accompanies the following features.
- Individuals can open an RD account under this scheme with a minimum monthly deposit of Rs.500.
- Its deposit period ranges between 1 year and 10 years.
- The scheme offers a nomination facility and also allows foreclosure of accounts.
How is Interest Calculated on DCB RD?
The formula given below is used extensively to calculate the interest amount and maturity value of a recurring deposit. Individuals can use the same to find out how much income they are likely to generate against their deposit amount for a given tenure and at varying DCB bank RD rates.
M = R x [(1 + i) x n – 1] / 1- (1 + i) (-1/3)
- M is Maturity Value
- R is Monthly Instalment
- i is Interest rate
- n is Tenure
Example: Prakriti deposits a monthly instalment of Rs.500 in a recurring deposit account for 2 years. The interest on it compounded annually at the rate of 6.5%. By using the recurring deposit formula,
M = R x [(1 + i) x n – 1] / 1- (1 + i) (-1/3)
= 500 x [(1 + 6.5) x 2 – 1] / 1- (1 + 6.5) (-1/3)
Therefore, the amount at maturity is Rs.12842.53, and the interest earned on the deposit amount is Rs.842.53.
Since the calculation involves a lot of steps, the occurrence of mistakes is not uncommon. Also, being a thorough computing method, it may consume a significant amount of time to complete it accurately.
However, individuals can eliminate the fear of making careless mistakes and complete the lengthy calculations within a few seconds by simply using the DCB bank recurring calculator online. Such a financial tool will also come in handy for those individuals who intend to compare the yields against their specific deposit amount at varying DCB Bank RD rates and tenure.
TDS on DCB Recurring Deposit
The interest amount accrued on the recurring deposit amount is subject to taxation. In a financial year, if an individual’s aggregate earnings from all deposit accounts surpass Rs.40000, he/she has to pay a TDS at the rate of 10%. Notably, the tax exemption limit for senior citizens is Rs.50000. Furthermore, RD holders who do not extend their PAN details to the bank will have to pay a TDS at the rate of 20%.
Nonetheless, individuals whose aggregate earnings from all deposits is less than the mentioned threshold limit can claim tax benefits while filing ITR by submitting Form 15G/ Form 15H.
However, there are certain conditions which must be met by the deposit holders to avail such tax-benefits. For example,
For Form 15G
- RD holders must be a residing Indian below 60 years of age.
- Should be an individual or HUF.
- The tax accrued on total income should be zero.
- The total tax amount should be lower than the basic exemption limit for a financial year.
For Form 15H
- RD holders should be at least 60 years of age.
- The taxable amount on aggregate income in a year should be zero.
By retaining such information, individuals looking to park their savings into RD accounts can maximise the profits from their investment effectively.