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 favour. The attractive Kotak RD interest rates and other such essential features make it a better savings tool than most others.
Kotak Mahindra Bank RD Interest Rates 2021
|Tenure||RD Rates for General Citizens||RD Rates for Senior Citizens|
|3 years to 3 years 364 days||4.75%||5.25%|
|4 years to 4 years 364 days||4.75%||5.25%|
|5 years to 10 years||4.50%||5.00%|
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.
Kotak Mahindra RD – Special Features
- An RD account with Kotak Mahindra Bank can be opened in the name of minor
- The tenure of the deposit ranges from 12 months to 120 months
- The minimum amount can deposited in Rs. 5,000 or Rs. 10,000 multiples
- Premature withdrawal is allowed under certain conditions with penalties
- Nomination facility is available
- Visit any Kotak Bank branch to avail this service
- TDS deductions depend on the existing income tax rules as at the time of opening the RD account
- Penalty on not paying the periodic deposit is Rate of RD interest rate + 2% p.a
Types of Kotak Mahindra Recurring Deposits
Recurring deposits offered by Kotak Mahindra Bank are of two types –
Cumulative recurring deposit account
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 the payout, depositors can enjoy substantial returns from their deposit.
Non-cumulative recurring deposit
With this type of RD, individuals can avail 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.
Premature Withdrawal of Kotak Bank RD
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.
How to Calculate Kotak RD Interest?
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.
Kotak Mahindra RD Account Eligibility
Typically, individuals belonging to any of the categories below can start a Kotak Mahindra RD Account –
- Resident Indian
- The sole or joint entity
- Non-resident Indian
It is a convenient option to mobilise 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 make them low-risk savings options.
Documents Required for Kotak Recurring Deposit Account Opening
Address Proof – The following documents (any 1) are required for address proof –
- Bank Statement
- Electricity Bill
- Telephone Bill
- Certificate/ID card issued
Identity Proof – The following documents (any 1) are required as identity proof –
- PAN card
- Voter ID card
- Government ID card
- Driving License
- The Senior Citizen ID card
- Ration Card
Factors that Influence Kotak Mahindra RD Rates
Before getting into details about Kotak 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
Deposit amount: A high deposit value accrues a higher rate of interest and helps deposit holders to grow their savings significantly.
- Tenure: In most cases, an RD account with a tenure of over 15 months is entitled to receive a higher rate of interest.
- Compounding Frequency: Usually, a higher compounding frequency yields higher interest and in turn, helps the deposit amount to grow.
- Customer type: The rate of interest also depends on the customer type. For instance, an additional Kotak RD Rates of 0.50% is paid to depositors who belong to the senior citizen category.
- RBI policies: Any major change in the policies of the Reserve Bank of India, pertaining to deposit accounts, will influence the Kotak Bank RD interest rates. For instance, rate cuts by RBI often lead to a reduction in the interest rates offered on recurring deposit schemes.
Kotak Bank RD Calculator
To avoid the cumbersome manual calculation process, individuals can use the Kotak Mahindra RD calculator 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.
TDS on Kotak Mahindra Recurring Deposits
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 case of form 15G
- One has to be a resident Indian below the age of 60 years.
- Deposit holder must be HUF or an individual.
- His/her computed tax amount on total income is nil.
- The total interest earned in the year should be less than the minimum tax exemption limit for the year.
In case of form 15H
- One must be a resident Indian who is at least 60 years of age.
- His/her tax amount on the total income is nil.
How to Open an RD account with Kotak Mahindra Bank?
One can use any of the following channels to open an RD account with Kotak Mahindra Bank:
- Call 1860 266 2666
- Existing Kotak users can just Login to your Kotak Net Banking account and open an RD account instantly
- Visit the nearest Kotak Mahindra Bank branch
Kotak Mahindra RD – FAQs
Ques. What is the tenure range of Kotak Bank Recurring Deposits?
Ans. Kotak Bank RD can be opened for a minimum tenure of 12 months to maximum tenure of 120 months.
Ques. Is there any cap on the maximum monthly instalment for Kotak Mahindra Bank RD account?
Ans. 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.
Ques. Is PAN information necessary while opening an RD account?
Ans. 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.
Ques. Can we choose a monthly or quarterly interest payout option?
Ans. No, the interest on Kotak RD will only be paid out upon maturity or on in the case of premature withdrawal. Monthly and quarterly payouts are currently not allowed.