Union Bank RD interest rates are indeed one of the best competitive rates that the market has to offer. Apart from monthly savings, the Union bank RD scheme provides you with great interest rates on your surplus savings. The tenure ranges from 6 months to 120 months (10 years). Union Bank offers different types of RD schemes to align with the different requirements of customers. Let’s delve deeper into the nitty-gritty of Union Bank RD rates and other important details.
|Tenure||Rates for General Citizens||Rates for Senior Citizens|
|181 days – 364 days||4.40%||4.40%|
|1 year 1 day – 2 years||5.10%||5.10%|
|2 years 1 day – 3 years||5.30%||5.80%|
|3 years 1 day – 5 years||5.40%||5.40%|
|5 years 1 day – 10 years||5.50%||5.50%|
Note: All RD interest rates mentioned above are for investment less than Rs. 2 crore
The interest on Union Bank Recurring Deposit is compounded at each quarter.
The formula used for calculation of the maturity value is –
A= P x (1+R/N) ^ (Nt)
The calculation of interest for Union Bank Recurring Deposit is illustrated in the example given below:
Ms. Roy decides to deposit Rs. 1,000 in a cumulative RD account for a period of 1 year at an interest rate of 6.75%, according to Union Bank’s applicable interest rates. Thus, according to the formula, Ms. Roy’s RD account will collect a maturity amount of Rs. 12,445. (Investment – Rs. 12000, interest – Rs. 445)
Existing customers of Union bank can simply go for the online method – Internet Banking. Just log onto the internet banking account and open an account online directly linked to the savings/current account. New customers, however, can approach the nearest UBI branch for instructions on opening an account. Make sure to carry all the required documents while going for the offline method.
Various types of RD schemes are provided by the Union Bank of India to suit the needs of various customers. There are enticing features associated with them and are known as Cumulative Deposit and Union Monthly Plus.
This scheme is perfect for investors with a low-risk appetite and is looking to invest small amounts in monthly installments with a fixed tenure. This type of RD is specially designed to cater to people starting from the lower to upper-middle-class including salaried individuals.
Moreover, the following people can also opt to open an RD and enjoy the benefits of Union Bank of India RD interest rates.:
People falling under the above-mentioned category can choose to open the Union Cumulative Deposit scheme as permitted by the Reserve Bank of India. Also, all the institutions, agencies and trusts permitted by RBI are eligible to open the account under this scheme.
Under this scheme, one gets options like ‘Step-up’ and ‘step-down’. With the help of these options, you can increase or decrease the monthly installments. This scheme is available to individuals, corporates, institutions, proprietorships, partnerships, etc.
The ‘Step-up’ option, as the name suggests, lets you increase the monthly installment amount. One can increase it up to 10 times the core amount. For instance, if the chosen core amount is Rs. 500, then you can increase or step it up to Rs. 5000.
If you have stepped up the installment amount, you might want to decrease it; this is where the step-down option comes into use.
Union bank Short term Recurring Deposit Interest Rates: The Short term recurring deposits from Union bank have their tenures starting from 6 months to 1 year. The interest rate for RDs with less than 2 crores deposits ranges from 4.50% p.a. to 5.25% p.a. For deposits more than 2 crores, checking with the nearest bank’s branch is advisable.
Union Bank Medium and Long-Term Recurring Deposit Rates: The medium and long-term Union Bank of India Recurring deposits range from more than 14 months to 10 years. The rate of interest offered by the bank for this type of tenures is somewhere between 5.30% p.a. to 5.60% p.a. for deposits less than 2 crores. For medium and long-term RDs of more than 2 crores, you need to contact the nearest Union Bank Branch.
Union Bank Senior Citizen RD Interest Rates: Senior citizens can avail of an additional interest rate of 0.50% over the regular interest rates for deposits less than Rs. 1 crore. Contact the bank’s nearest branch for deposits amounting to more than 1 crore.
Indian residents and HUF (Hindu Undivided Families) can open an RD account at UBI. NRIs can choose to open the RD account through NRO and NRE accounts.
Union Bank provides RD account opening for minors as well, to supervise their finances under the guardianship of parents.
Individuals require these documents to open a Union Bank RD account.
Investment in Union Bank of India RDs is not tax deductible under Section 80C of the Income Tax Act of 1961. Furthermore, the Union Bank of India RD interest income is taxed at the investor’s marginal tax rate. Furthermore, Union Bank of India RD investors must report their interest income under the heading ‘Income from Other Sources.’ In addition, interest income is liable to TDS. The Union of India Bank reduces TDS based on whether or not the investor has disclosed his or her PAN details.
The Union Bank of India offers investors the option of borrowing against recurring deposits. As a result, depositors are able to meet their financial liquidity requirements. It also removed the headache of applying for a new loan.
Q1. Does Union Bank of India allow a Premature Withdrawal Facility?
Union Bank of India allows the Premature withdrawal of RD under both of its RD schemes, viz. Cumulative and Union Monthly Plus without any penalty. However, partial withdrawal of the RD amount is not allowed.
Q2. Is there any receipt provided for the Cumulative Deposit account?
No, but a passbook is provided.
Q3. Is TDS applicable in the case of Cumulative Deposits?
No, TDS is not applicable to Cumulative Deposits.
Q4. Does UBI allow changing nominees?
Yes, one can change the nominees added to their RD account.
Q5. Can this account be opened for a minor?
Yes, the Union Bank RD can be opened for a minor under guardianship.