Kotak Mahindra Bank’s Recurring Deposit is one of the saving schemes by the lender that offers a good interest rate to help you reach your financial goals sooner. Among them, recurring deposits or RDs are considered to be one of the most preferred savings instruments these days. The fact that it enables individuals to build a reliable corpus with minimum regular investments certainly works in its favor. The attractive Kotak Mahindra RD rates and other such essential features make it a better savings tool than most others.
|Tenure||RD Rates for General Citizens||RD Rates for Senior Citizens|
|3 years to 3 years 364 days||5.40%||5.90%|
|4 years to 4 years 364 days||5.40%||5.90%|
|5 years to 10 years||5.50%||6.00%|
It must be noted that Kotak RD interest rates are revised periodically as and when the bank deems fit. The new RD rates are usually based on the date and time of when the account is started. Individuals must get in touch with the representative of Kotak Bank to avail accurate and case-specific details about the applicable RD rates of Kotak Mahindra.
The interest on the Kotak Mahindra Recurring Deposit is compounded quarterly and the formula used for calculation of the maturity value is:
A= P x (1+R/N) ^ (Nt)
A = Maturity Amount.
P = Monthly Installment
N = Number of times the interest is compounded.
R = Rate of Interest
t = tenure
For example, Mr. Piyush, who lives in Orissa and is below 60 years of age, decides to open an RD account with Kotak Mahindra with a deposit of Rs 4400 for 5 years. Therefore, the applicable interest rate for him is 4.50%. In that case, the total interest amount accumulated at the end of the maturity period will be Rs. 32,419 and his total maturity amount will be Rs. 2,96,419.
To avoid the cumbersome manual calculation process, individuals can use the online calculation tool of Kotak Mahindra RD and compute the accurate maturity value and interest amount for the given tenure. It not only helps users eliminate the risk of manual errors but also helps them to save significant time and energy.
Moreover, an online RD calculator is quite simple to use; all one needs to do is enter details like the monthly deposit value and tenure. Individuals can also make several adjustments to arrive at a suitable combination of deposit amount and tenure.
One can use any of the following channels to open an RD account with Kotak Mahindra Bank:
Recurring deposits offered by Kotak Mahindra Bank are of two types –
With a cumulative RD account, individuals can choose to avail the interest amount, alongside the amount deposited, after the completion of the RD’s tenure. With this RD, since the interest amount is accrued periodically without availing of the payout, depositors can enjoy substantial returns from their deposits.
With this type of RD, individuals can avail of periodic interest payouts and are thus more suitable for those looking for a short-term deposit plan to park their corpus. With non-cumulative recurring deposits, however, the returns are significantly lower than the former one.
Typically, individuals belonging to any of the categories below can start a Kotak Mahindra RD Account –
It is a convenient option to mobilize small savings each month to build a reliable fund. Generally, it is considered to be a suitable savings plan for salaried individuals who do not generate substantial income to make lump sum investments. Also, the fact RD schemes are least affected by prevailing market conditions effectively makes them low-risk savings options.
Address Proof – The following documents (any 1) are required for address proof –
Identity Proof – The following documents (any 1) are required as identity proof –
Before getting into details about Kotak’s recurring deposit interest rates, it is crucial for depositors to be familiar with factors influencing the RD rates.
Following are a few such factors that impact the rates
As per the Income Tax Act, 1961, all RD schemes are subjected to tax because the interest earned on the deposit amount gets added to the depositor’s annual income. In turn, the interest earned becomes a part of one’s taxable income.
Notably, if the total accrued interest amount exceeds Rs.10000 in a year, a TDS at the rate of 10% is charged on it. However, the RD account holder can raise a claim for tax exemption by submitting Form 15G/15H.
It must be noted here that the RD account holder must meet a few conditions to file such forms. For instance,
In the case of form 15G
In the case of form 15H
Kotak Bank Bank allows the Premature withdrawal of RD. However, the Bank may levy a nominal amount of penalty as per their banking norms. Penalty on non-payment of the installment on time is Rate of RD interest rate + 2% p.a. However, Partial withdrawal of Kotak Bank RD account is not allowed.
Q1. What is the tenure range of Kotak Bank Recurring Deposits?
Kotak Bank RD can be opened for a minimum tenure of 12 months to maximum tenure of 120 months.
Q2. Is there any cap on the maximum monthly installment for the Kotak Mahindra Bank RD account?
The maximum monthly installment amount for a tenure greater than 36 months is limited to Rs.25,000. However, for tenures up to 36 months or less, the monthly deposit amount is restricted to Rs.1 lakh.
Q3. Is PAN information necessary while opening an RD account?
Providing PAN details is important while opening an RD account. By providing PAN details, the applicable TDS rate will be relatively lower than an account opened without PAN details.
Q4. Can we choose a monthly or quarterly interest payout option?
No, the interest on Kotak RD will only be paid out upon maturity or in the case of premature withdrawal. Monthly and quarterly payouts are currently not allowed.
Q5. Can I choose my payout?
According to the bank, the interest will only be paid out on maturity and prematurity.