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.
In this article
- IDBI Bank RD Interest Rates for Different Tenures
- Key Features of IDBI RD Interest Rates
- Premature Withdrawal Rules of IDBI RD Account
- How to Calculate the Maturity Amount on IDBI RD?
- IDBI Recurring Deposit Scheme Eligibility criteria
- Documents Needed to Open IDBI RD Account
- Term Wise IDBI Bank RD Interest Rates
- IDBI RD Tax Benefits
- Factors Affecting IDBI Bank Recurring Deposit Rates
- How to Apply for an RD Account at IDBI Bank?
- IDBI Bank RD – Frequently Asked Questions
IDBI Bank RD Interest Rates for Different Tenures
|Tenure||RD Rates for General Citizens||RD Rates for Senior Citizens|
|1 year 1 day – 2 years||5.75%||6.25%|
|2 years 1 day – 3 years||5.80%||6.30%|
|3 years 1 day – 5 years||5.75%||6.25%|
|5 years 1 day – 10 years||5.80%||6.30%|
Key Features of IDBI RD Interest Rates
- IDBI offers a loan facility of 90% against your RD account
- Nomination facility is provided so that you can nominate someone to collect your maturity amount.
- The tenure of the deposit ranges from 6 months to 120 months (10 years)
- An IDBI RD account can be opened by visiting any nearest IDBI branch
- TDS deductions depend on the existing income tax rules set at the time of opening the RD account.
- The interest rates go up to 5.90% for general citizens and 6.40% for senior citizens
Premature Withdrawal Rules of IDBI RD Account
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, partial withdrawal facility is not available at IDBI.
How to Calculate the Maturity Amount on IDBI RD?
The formula used to calculate the amount received upon maturity is A = P(1+r/n) ^ nt.
- ‘A’ = final amount received
- ‘P’ = principal
- ‘r’ = annual interest rate
- ‘n’ = number of times interest has been compounded
- ‘t’ = tenure
IDBI 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 IDBI 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 IDBI given that his/her parents will supervise the finances under their guardianship
Documents Needed to Open IDBI 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 IDBI Bank RD Interest Rates
IDBI Bank Short-Term RD Interest Rates: Under this scheme, IDBI bank offers recurring deposits with a tenure starting from 1 year to 2 years. The IDBI Bank interest rates offered by the bank on short-term deposits are 5.75% and 5.85% respectively.
IDBI Bank Medium-Term RD Interest Rates: The medium-term RD tenure ranges from 3 years to less than 5 years and the interest offered by the bank under this scheme is 5.75%.
Long-Term IDBI Bank RD Interest Rates: The tenure for long-term RDs ranges from 5 years to 10 years and the interest rate offered by the bank on this type of scheme is 5.80%.
IDBI Bank Senior Citizen RD Interest Rates
Senior Citizens can avail an extra interest rate of 0.50% over regular IDBI Bank RD interest rates 2020. For tenures ranging from 1 year to 2 years, the interest rate is 6.25%. On the other hand, for RD tenures from 7 years to 10 years, the interest rate is 6.30%.
IDBI RD Tax Benefits
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.
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 2019-20 (AY 2020-21)
Penalty on Delayed Installment of IDBI Bank RD account
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.
IDBI Bank RD Interest Rate Calculator
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 lower 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.
Alternatively, one can also take the help of the IDBI RD Interest calculator to check the interest earned on their deposit.
Factors Affecting IDBI Bank Recurring Deposit Rates
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.
How to Apply for an RD Account at IDBI Bank?
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.
IDBI Bank RD – Frequently Asked Questions
Ques. What is the eligibility to open an IDBI RD account?
Ans. 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.
Ques. What are the documents required for IDBI Recurring Deposit Scheme?
Ans. Any valid identity proof and address proof will suffice along with passport size photographs of the applicant and duly filled application PNB RD account.
Ques. Does PNB allow partial withdrawal of the RD account?
Ans. No, the bank doesn’t allow partial withdrawal of recurring deposits.
Ques. How to add nominees to the RD account?
Ans. 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.