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.
In this article
- Union Bank RD Interest Rates 2021
- Union Bank of India Recurring Deposit – Special Features
- Types of Union Bank RD Schemes
- Union Bank of India – Term Wise Recurring Deposit Interest Rates
- How to Calculate UBI RD Interest?
- Union Bank RD Eligibility
- Documents Required
- How to Open a Recurring Deposit with Union Bank of India?
- Union Bank RD – FAQs
Union Bank RD Interest Rates 2021
|Tenure||Rates for General Citizens||Rates for Senior Citizens|
|181 days – 364 days||4.50%||4.50%|
|1 year 1 day – 2 years||5.30%||5.30%|
|2 years 1 day – 3 years||5.50%||5.50%|
|3 years 1 day – 5 years||5.55%||5.55%|
|5 years 1 day – 10 years||5.60%||5.60%|
Note: All the interest rates mentioned above are for investment less than Rs. 2 crore
Union Bank of India Recurring Deposit – Special Features
- Union Bank of India RD interest rates goes up to 5.60%
- Interest on RD is compounded quarterly.
- The minimum RD deposit for UBI starts at Rs. 100.
- For senior citizens RD rates offered is up to 5.60%.
- Nomination facility is available
- The deposit tenure ranges from 6 months to 120 months
- Premature withdrawal penalty is not applicable
- No penalty levied on delayed payment of installment
Types of Union Bank RD Schemes
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.
Union Bank Cumulative Deposit
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.:
- An individual who is a resident of India and holds a savings account with Union Bank
- Two or more individuals with a joint account
- Impaired or illiterate individuals
- Minors under the guardianship of their parents
- Any association, club or society, etc
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.
Features of Cumulative Deposit
- The minimum deposit amount starts from as low as Rs. 50 per month as installments
- Tenures range from 6 months to 120 months (10 years). One can choose from any tenure between the same
- One cannot change the number of installments; however, it can be converted into a term deposit before the maturity date
- Interest rates are compounded quarterly
- TDS is applicable on the interest accrued of the cumulative deposit
- The final amount is disbursed a month after the last installment of the deposit
Union Bank of India Union Monthly Plus
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, proprietorship, partnerships, etc.
Features of Union Monthly Plus
- One needs to choose the core amount to open the RD account which ranges from a minimum of Rs. 100 and a maximum of Rs. 1 lakh.
- The tenure of the deposit ranges from 6 months to 60 months (multiples of 1 month)
- Interest rates on Monthly Plus are like the term deposit offered by Union Bank and are computed on a daily product basis
- It provides the account holder with great options of Step-up or Step-down that is explained in the next section
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 in to use.
Union Bank of India – Term Wise Recurring Deposit Interest Rates
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.
How to Calculate UBI RD Interest?
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)
- A = Maturity Amount.
- P = Recurring Deposit.
- N = Number of times the interest is compounded.
- R = Rate of interest.
- t = Tenure
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)
Union Bank RD Eligibility
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.
- Identity proof such as Aadhaar, PAN card, Passport, driving license, ration card, etc.
- Address proof such as passport, electricity bill, telephone bill, etc.
How to Open a Recurring Deposit with Union Bank of India?
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.
Union Bank RD – FAQs
Ques. Does Union Bank of India allows a Premature Withdrawal Facility?
Ans. 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.
Ques. Is there any receipt provided for the Cumulative Deposit account?
Ans. No, but a passbook is provided.
Ques. Is TDS applicable in the case of Cumulative Deposits?
Ans. No, TDS is not applicable to Cumulative Deposits.
Ques. Does UBI allow changing nominee?
Ans. Yes, one can change the nominees added to their RD account.