Axis bank provides the facility of opening a Recurring Deposit and earning profits on the deposited money in the form of interest. An Axis Bank recurring deposit account can be opened for tenures ranging from 6 months to 120 months (10 years). The Axis bank rd interest rates range from 4.40% p.a. to 6.50% p.a. Senior citizens are entitled to get a 0.50% extra interest over the regular ones.
|Tenure||General Interest rates (p.a.)||Senior Citizen Interest Rates (p.a.)|
|9 months – 11 months 24 days||4.40%||4.65%|
|1 year 5 days – 1 year 10 days||5.10%||5.75%|
|1 year 11 days – 12 months 29 days||5.10%||5.75%|
|1 year – 1 year 4 days||5.15%||5.75%|
|11 months 25 days – 364 days||5.10%||5.75%|
|13 months – 13 months 29 days||5.10%||5.75%|
|14 months – 16 months 29 days||5.10%||5.75%|
|17 months – 17 months 29 days||5.10%||5.75%|
|18 months – 1 year 364 days||5.25%||5.90%|
|2 years – 29 months 29 days||5.40%||6.05%|
|3 years – 4 years 364 days||5.40%||5.90%|
|30 months – 3 years||5.40%||5.90%|
|5 years – 10 years||5.75%||6.50%|
The RD interest rates offered on Axis bank recurring deposit is compounded each quarter.
The formula used for calculation of the maturity value is –
A= P x (1+R/N) ^ (Nt)
A is the Maturity Amount.
P is a Recurring Deposit.
N is the Number of times the interest is compounded.
R is the Rate of interest.
T is Tenure.
Here is an example of the same,
Rahul deposits Rs. 500 each month for 9 months. The rate of interest applicable on her Axis Bank Recurring Deposit account is 6.5% (for regular RD). The sum on maturity would be –
A= P x (1+R/N)^(Nt)
= 4500 x (1+6.5/4)^(4×9/12)
= Rs. 4,623.
Hence, the interest income from the recurring deposit is Rs. 123.
Important Note: The interest in RD with Axis Bank is calculated quarterly.
The simplest way to check how much profit you will make upon maturity of your Axis Bank RD account is to use the online Axis Bank RD calculator which can be accessed on various websites. This is by far the simplest method to evaluate the interest. All you need to do is provide the basic details in the fields like amount, tenure, and the rate of interest.
Individuals can apply for an Axis Bank Recurring Deposit –
Gather all of the paperwork needed to open an Axis Bank RD account and visit a nearby bank to request the intimation procedure. One of the Axis Bank employees will assist you throughout the application process. It is recommended that photocopies of documents be brought with you.
Step 1: Navigate to Axis Bank’s official website.
Step 2: Hover your cursor over the ‘Login’ button at the top of the page. Choose ‘Login’ from the ‘Personal’ section of Internet Banking.
Step 3: Select “Create Recurring Deposit.”
Step 4: Fill out the form that displays the depositor’s and nominee’s information, if applicable.
Step 5: Once confirmed, the deposit amount will be taken from the customer’s savings account, and a receipt will be issued to the customer through email (for those who have registered for e-statement) or physically via post.
Step 1: Access the bank’s mobile application, Axis Mobile.
Step 2: Select the ‘Open RD’ option.
Step 3: Upon confirmation, the selected amount will be deducted from the linked savings account and an RD account will be created promptly.
If you have registered for an e-statement, a confirmation email will be sent to your registered email; otherwise, a physical statement will be mailed to you.
Under the guidelines laid down by the Income Tax Act 1961, all Recurring Deposits are liable for taxation. The proceeds earned by an individual would incur a TDS at the rate of 10% if the accrued interest exceeds Rs. 10,000 in a financial year. However, individuals who would not be able to furnish PAN would incur TDS at the rate of 20%. However, individuals can protect their earnings against TDS by submitting a declaration under Section 197A. They can do so by filling a 15G or a 15H form, whichever is applicable in their case.
Individuals can withdraw prematurely from their Axis Bank RD account, but a penalty equivalent to 1% of the applicable interest has to be paid by them. Such a feature would help individuals to meet their financial crunch at a time of need. However, it should be noted that partial withdrawal from the RD is not applicable. Moreover, if there is a delay in the monthly payments, the bank will charge Rs. 10 per Rs. 1000 a month.
Customers who opened the recurring deposit after August 9, 2016, must pay a penalty of Rs. 10 for every Rs. 1000 in late payments. Existing clients who open an account after the calendar month has passed must pay a penalty of the current business prime lending rate + 4% for the delay.