IDBI or Industrial Development Bank of India is a renowned government-owned financial institution established in the year 1964. Providing a diverse range of personalised financial solutions across loans, deposits, investments and more, IDBI is currently the tenth largest development bank globally. Among other services for retail investors, The IDBI Recurring Deposit provides a safe investment avenue with assured returns. It allows for periodic investment of funds to earn interest at attractive rates.
Eligibility Criteria for IDBI Recurring Deposit Account
You must be either of the following to open an RD account with IDBI.
- An Indian citizen applying as an individual or as a HUF (Hindu Undivided Family).
- An NRI investing in RD via an NRO (Non-Resident Ordinary) or an NRE (Non-Resident External) account.
A minor is also eligible to open an RD account with IDBI under the guardianship of either or both of the parents or any other natural guardian.
Documents Required for RD Account Opening
Individuals are required to submit the necessary documents as identity and address proof to open an IDBI Recurring Deposit account. Check out the list of documents you can submit as identity and address proof below.
- Proof of identity
- PAN card
- Aadhaar card
- Voter ID card
- Driving license
- Any other valid photo identity card issued by the government or another authorised body.
- Proof of address
- Aadhaar Card
- Voter ID card
- Utility bills
- Telephone bills
- An ID card or certificate issued by any post office
- Any other valid proof of address issued by the government or any other authorised body.
Interest Rates Applicable on IDBI Bank ID
With effect from 20th January 2020, interest rates on IDBI Recurring Deposit are as follows.
|Deposit Tenure||Regular Interest Rates (Per annum)||Interest Rates for Senior Citizens (Per annum)|
|Between 1 year and 2 years||6.35%||6.85%|
|Between 2 years and 10 years||6.25%||6.75%|
Plus, the FD rates for NRI investors are as follows.
|Deposit Tenure||Rates of Interest (Per annum)|
|Between 1 year and 2 years||6.35%|
|Between 2 years and 10 years||6.25%|
Note that if Recurring Deposit with IDBI is discontinued before 3 months, interest will not be payable. For RDs discontinued after 3 months, but before 1 year of completion, interest is payable at applicable rates for the savings account.
In the case of senior citizens opting for premature closure of an RD account with IDBI, the interest payment will be at an incremental rate of 0.50% on the condition that the deposit has been maintained for at least a year from the date of first periodic deposit.
Premature RD Withdrawal Terms and Conditions
IDBI facilitates premature withdrawal of recurring deposits with minimum hassles. Individuals need to apply in the prescribed format to make premature withdrawals of their RD investments with IDBI.
Interest paid on premature RD withdrawal will be as per the applicable rate for the existing amount calculated for the period such deposit remained with the bank. Also, as per the updated policy for premature RD account closure; a penalty of 1% is levied on the applicable deposit rate.
While premature withdrawal is facilitated, IDBI does not allow partial withdrawal of Recurring Deposits.
TDS is applicable for interest earned on IDBI Recurring Deposit as per the Income Tax Act 1961. However, if an individual’s total interest income for the financial year is less than Rs. 40,000, he/she can submit Form 15G to the bank. In the case of senior citizens, Form 15H is applicable for the purpose, and the upper limit on interest earnings is Rs. 50,000, up to which no TDS is levied.
Loans against IDBI Recurring Deposits
Investors can avail loans amounting up to 90% of the accumulated amount (i.e. principal plus interest) against their IDBI bank RD.
Advantages of Recurring Deposits at IDBI
Following are the advantages that accompany an RD investment with IDBI –
- It is an ideal investment option for individuals who do not have funds in a lump sum but want to earn through periodic, i.e. monthly deposits.
- You can start an IDBI bank RD with a small minimum amount.
- IDBI bank Recurring Deposit comes with a hassle-free premature withdrawal and foreclosure facility.
- With a fixed rate of RD interest, you can earn stable returns over the tenure.
- You can avail loan against your accrued RD amount.
- IDBI provides a simple account opening process for its Recurring Deposits.
- You can choose a suitable amount for monthly deposit as per your capacity, starting from Rs. 100.
- Choose a suitable tenure between 1 year and 10 years for an IDBI RD account as per your requirement.
- You can open an RD account with IDBI simply by visiting the nearest bank branch, or through internet banking.
- You have an option to make monthly RD deposits with IDBI either via ECS mandate, standing order or through direct remittance.
Q1. How to apply for an RD with IDBI?
- You can apply for an IDBI Recurring Deposit by approaching your nearest branch. You can also request for account opening via a call on their phone banking numbers.
Q2. Are there any charges applicable for standing instructions execution towards deposits to the RD account?
- No, IDBI does not levy any charges for executing standing instructions for deposits to the RD account.
Q3. What is the upper limit for monthly deposits to IDBI RD account?
- You can remit up to Rs. 1 Crore as the maximum monthly deposits to your RD account with IDBI.
Q4. What is the longest tenure I can opt for when opening an RD account with IDBI?
- The maximum tenure available for IDBI RD is 10 years.
Q5. Are premature withdrawal rules the same for NRIs as for resident Indians?
- Yes, NRIs are subjected to the same premature withdrawal rules for RD as resident Indians.
Q6. Do senior citizens receive any additional benefits on IDBI RDs?
- Yes, IDBI offers RD interest at 0.50% higher than regular rates for senior citizens.
Q7. What will be my interest-earning if I discontinue my RD before 3 months?
- As per rules laid down by IDBI, no interest is payable on RDs discontinued within the first 3 months.
Q8. How can I save on TDS for RD interest earnings?
- To save on your RD TDS, you can submit form 15G declaring that your total interest earnings for the year are less than Rs. 40,000. In this case, Form 15H is applicable for senior citizens for income below Rs. 50,000.