Indian Overseas Bank (IOB) was established back on 10th February 1937, to facilitate foreign exchange transactions both domestically and overseas. Recurring deposit is one among various commercial and consumer banking products that the bank offers. IOB Recurring Deposit, a specialised term deposit scheme offered by the bank suitably serves the savings and investment requirements of individuals with stipulated or limited funds.
In this article
- Types of Recurring Deposits with IOB
- Eligibility Criteria for Opening an IOB Recurring Deposit Account
- Documents Required for IOB Recurring Deposit
- Interest Rates on IOB Recurring Deposits
- Premature RD Account Closure Terms and Conditions
- Advantages of IOB Recurring Deposit
- Frequently Asked Questions
Types of Recurring Deposits with IOB
Indian Overseas bank extends the following RD options for its customers. The RD details in IOB bank are mentioned below :
Recurring Deposit (Regular)
A regular IOB Recurring Deposit account can be opened for a tenure ranging between 6 and 120 months. Interest on these RDs is compounded every quarter. You can start your RD at IOB with a minimum deposit of Rs. 50.
- Flexi Recurring Deposit
A Flexi RD with IOB can be started with a minimum core deposit amount of Rs. 1,000/month. The maximum deposit core deposit amount can go up to Rs. 1 Lakh/month and monthly deposits can range between the minimum core amount, i.e., Rs. 5,000 and 10x the minimum core amount. It should be in multiples of Rs. 100.
IOB’s Flexi RD comes with a special feature of no limit to the total number of credits subjective to the maximum remittance being ten times of the core amount. The minimum tenure under Flexi RD starts from 12 months, with maximum tenor ranging up to 120 months. You can opt for a suitable tenure in multiples of 6 months, starting from the minimum tenure of 12 months.
- IOB Eighty Plus
The IOB Recurring Deposit variant can be opted for by super senior citizens. Interest rates on IOB Eighty Plus RD are applicable at 0.75% over the regular rates of interest applicable on term deposits. You can start an IOB Eighty Plus RD with a minimum tenure of 6 months, extending up to 120 months.
An individual over 60 years of age can open an IOB Recurring Deposit account to enjoy interest-earning at 0.50% higher than the regular rates. RD under Vardhan can be started with a minimum amount of Rs. 100. Also, the minimum RD tenure is 6 months, with maximum tenure extending up to 120 months.
Eligibility Criteria for Opening an IOB Recurring Deposit Account
You need to belong to either of the following categories to open an IOB Recurring Deposit account.
- A salaried individual
- Small trader
- An individual with periodic income
- A rural investor
- An individual with limited income is able to save only in a small amount.
Documents Required for IOB Recurring Deposit
You can open an IOB Recurring Deposit account either by visiting your nearest IOB branch or via net banking by submitting the following documents.
- Identity proof (any 1)
- PAN card
- Voter ID card
- Aadhaar card
- Driving License
- Any other photo ID issued by the government or any other authorised body
- Address proof (any 1)
- Aadhaar card
- voter ID card
- Utility bills
- Telephone bill
- Any other document issued by the government or an authorised body carrying the applicant’s present address.
Interest Rates on IOB Recurring Deposits
IOB offers attractive interest rates on its recurring deposit scheme, which also varies depending on the tenure you opt for. Senior citizens can further earn an additional interest rate of 0.50% over and above the regular interest rate. For super senior citizens, i.e., individuals above the age of 80 years, the interest rates increase by 0.75%.
Following is an elaboration on interest rates applicable for IOB Recurring Deposit under Rs. 2 Crore.
|Tenure of Deposit||Applicable Interest Rates|
|7 to 14 days (Minimum deposit of Rs. 1 Lakh)||4.50%|
|15 to 45 days||4.50%|
|46 to 90 days||4.60%|
|91 to 120 days||5.25%|
|121 to 179 days||5.50%|
|180 to 269 days||5.75%|
|270 days to less than 2 years (Excluding a deposit of 444 days)||6.25%|
|A deposit of 444 days or 2 years to less than 3 years||6.35%|
|A deposit of 3 years and above||6.25%|
NREs can opt for recurring deposit IOB extending for a tenure of over 1 year. Interest rates applicable on NRE recurring deposits are the same as those on regular recurring deposits.
Premature RD Account Closure Terms and Conditions
Indian Overseas Bank offers a hassle-free RD account closure prematurely irrespective of the amount of deposit or the period opted or completed. The interest rate can, however, vary from the one agreed upon during an RD account opening. Plus, interest payable will depend on the amount deposited and the period for which it remained with IOB.
The charges applicable on the foreclosure of an RD account with IOB are as follows.
|Types of RDs||Applicable Premature Closure Charges|
|RDs of up to Rs. 15,000||0%|
|RDs between Rs. 15,001 and Rs. 5 Lakh||0.50%|
|RDs between Rs. 5 Lakh and Rs. 1 Crore||1%|
|RDs above Rs. 1 Crore||1%|
Interest accrued on recurring deposits is subject to TDS deductions at 10%, provided the total earnings of an individual exceed Rs. 40,000 (for senior citizens, the limit rises to Rs. 50,000). Investors satisfying this eligibility criterion can submit 15G (15H for senior citizens) as a declaration of the same to avail complete TDS rebate on recurring deposit earnings.
Loan Against Recurring Deposit with IOB
IOB extends loans of up to 90% of the accrued value under Recurring Deposits. The loan can be availed by an individual investor, or jointly only with the spouse. Interest payable on these loans will be calculated at 1% plus the deposit rate in the case of demand loans.
Advantages of IOB Recurring Deposit
Check out the host of benefits that one can enjoy with IOB RD schemes.
- The scheme comes with attractive interest rates, with earnings capacity for senior and super senior citizens a margin higher than regular investors.
- It is a simple scheme that enables you to make small monthly investments for corpus growth to meet financial goals in the future.
- The scheme is suitable for salaried individuals with fixed monthly income for all financial requirements.
- Indian Overseas Bank RD does not come with an upper limit for monthly investments. So, you can make investments as per your capacity.
- You can also avail loan on your recurring deposit with IOB to meet your immediate funding requirements depending on the amount of investment already made. It thus improves the accessibility of funds despite fixed investment tenure.
- Premature account closure facility is available with an RD in IOB with minimum hassle.
- It is a risk-free investment, offering the safety of the invested amount as well as assured returns.
- The facility for giving standing instructions to the bank for monthly deposits is available to ensure you do not miss any payments.
- Choice of tenure is flexible for an IOB RD account.
Hence, IOB recurring deposit is one of the most convenient non market-linked investment options, wherein individuals can expect manifold returns with a negligible risk factor.
Frequently Asked Questions
- What are the minimum and maximum deposit tenures for RDs at IOB?
Deposit tenures usually range between 6 and 120 months for IOB RDs.
- Are there any additional benefits on IOB Recurring Deposit for senior citizens?
Yes, interest payable on RDs for senior citizens between 60 and 80 years are 0.50% higher than regular rates. For those above 80 years of age, RD interest rate increases by 0.75%.
- What is the minimum deposit amount for RD?
The minimum deposit amount for IOB RD is Rs. 50.
- Will my RD interest attract TDS?
No, TDS deduction on RD interest earning is not applicable as per the Income Tax Act 1961.
- How much loan can I avail on an accrued RD of Rs. 50,000?
With IOB, the loan available on the accrued amount of RD is up to 90%. Hence the loan you can avail on the accrued amount of Rs. 50,000 can be up to Rs. 45,000.
- Can I start a Flexi RD with a minimum tenure of 6 months?
No, the minimum tenure for a Flexi RD with IOB is 12 months.
- What is the interest rate on a 444-day RD with IOB?
With effect from 8th January 2020, a 444-day RD fetches returns at the rate of 6.35%.
- Can an NRI open an RD account with IOB?
Yes, an NRI can open an RD account with IOB through an NRE and NRO account.
- Can I make a partial withdrawal from my RD account?
No, IOB does not allow partial withdrawal from an RD account. You can, however, opt for premature closure by paying applicable fees.
- Can I avail the nomination facility for two individuals on my RD account?
No, nomination facility on IOB Recurring Deposit account is available only for one nominee per account. You can opt to change the nominee via a declaration.