IDBI Bank offers enticing recurring deposit interest rates and the tenure ranges from 1 – 10 years. Established in 1964, IDBI, short for Industrial Development Bank of India, is a private sector full-service universal bank that provides a wide range of banking services. One can open an IDBI RD account by depositing an amount as low as Rs. 100. The detailed interest rates are given down the page.
|Tenure||RD Rates for General Citizens||RD Rates for Senior Citizens|
|1 year 1 day – 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%|
The formula used to calculate the amount received upon maturity is A = P(1+r/n) ^ nt.
There will be a nominal amount of penalty 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. Also, a partial withdrawal facility is not available at IDBI.
To open an RD account, one must be a citizen of India or a HUF (Hindu Undivided Families)
IDBI 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.
The bank may provide you with some extra days grace in case you are unable to make the payment beyond the due date due to some reasons. However, frequent irregular payments will not be entertained by the bank and a nominal amount of penalty will be levied by the bank as per their norms.
The RD maturity amount including the interest rate depends on the following parameters:
Deposit Amount: The initial amount deposited by a customer in their account. The deposit amount for IDBI RD starts from as low as Rs 100.
IDBI RD Interest Rates: IDBI Bank offers a comparatively higher rate of interest on recurring deposits with longer tenure and lowers interest rates for an account opened for a shorter period. The highest interest rate offered by the bank is 5.90% for the deposit amount.
Deposit Tenure: As mentioned in the previous point, low-interest rates are offered for short tenure RDs and vice-versa.
IDBI Systematic Savings Plan (SSP) enables them to save at their leisure. Every month, anyone can begin saving any fixed amount ranging from INR 100 to less than INR 2 crore. The strategy is appropriate for pre-planned financial objectives.
The SSP Plus scheme provides regular savings with principal and interest protection, as well as complimentary insurance coverage and incentive points.
RBI’s Policies: Certain factors like the change in Cash Reverse Ratio (CRR) and repo rate as set by the RBI may affect the interest rates of all banking services including recurring deposits.
Recession: RBI releases funds in the market in times of recession, hence surfacing liquidity in the market. Owing to the high liquidity and low credit demand in the market, banks reduce their rates on RD.
Inflation: Inflation, on the other hand, has a positive effect on RD rates, and the market witnesses a rise in interest rates at the time of inflation.
State of the economy in India: With the economy going leaps and bounds, people tend to take larger credits to fulfill their personal and business requirements. Whenever there is high credit demand, banks offer higher interest rates to collect more funds through recurring deposits.
The IDBI RD account can be opened either offline by visiting your nearest IDBI bank branch by logging on to the bank’s net banking if you already have an account with the bank.
Q1. What is the eligibility to open an IDBI RD account?
Any individual who is an Indian resident and HUF (Hindu Undivided Families). NRIs can also opt for an RD account through NRO and NRE accounts. Bank also provides an RD scheme for minors (less than 10 years of age) under the guardianship of parents to monitor their finances.
Q2. What are the documents required for IDBI Recurring Deposit Scheme?
Any valid identity proof and address proof will suffice along with passport size photographs of the applicant and duly filled application PNB RD account.
Q3. Does PNB allow partial withdrawal of the RD account?
No, the bank doesn’t allow partial withdrawal of recurring deposits.
Q4. How to add nominees to the RD account?
Nominees can be added while opening an RD account online by providing the details of the nominee. Whether it is in a single name or joint name, only one nominee per account is permissible.
Q5. How many reward points are received when the SSP Plus scheme is opened?
The bank offers up to 1,000 complimentary one-time redeemable reward points.