Union Bank RD Interest Rates

Introduction

Union Bank of India, one of the prominent public sector banks in India, offers a range of financial products to its customers, including the popular Recurring Deposit (RD) scheme. Recurring Deposits are an ideal savings option for individuals who want to save a fixed amount regularly and earn a steady interest on their savings. This guide will provide detailed information on Union Bank RD interest rates, the benefits of opening an RD account with Union Bank, how to calculate the interest and more.

What is a Union Bank Recurring Deposit (RD) Account?

A Union Bank Recurring Deposit (RD) account allows customers to deposit a fixed amount of money every month for a predetermined period. The bank pays interest on the deposited amount, which is compounded quarterly. At the end of the tenure, the customer receives the maturity amount, which includes the principal and the interest earned.

Current Union Bank RD Interest Rates

Union Bank of India offers competitive interest rates on RD accounts, which vary based on the tenure of the deposit. Here is a detailed breakdown of the interest rates for different tenures:

• 6 months to less than 1 year: 5.50% per annum
• 1 year to less than 2 years: 6.00% per annum
• 2 years to less than 3 years: 6.25% per annum
• 3 years to less than 5 years: 6.50% per annum
• 5 years and up to 10 years: 6.75% per annum

These rates are subject to change based on RBI regulations and other economic factors. It is advisable to check the latest rates on the Union Bank of India website or visit a branch for the most accurate information.

You may also want to know Bank of India RD Interest Rates

Union Bank RD Interest Rates Calculator

To help customers estimate their returns, Union Bank provides an RD interest rates calculator on its website. The calculator allows you to input the monthly deposit amount, tenure, and applicable interest rate to calculate the maturity amount.

Here’s how you can use the Union Bank RD interest rates calculator:

1. Visit the Union Bank official website: Navigate to the ‘Calculators’ section under the ‘Deposits’ tab.
2. Select the RD Calculator: Choose the Recurring Deposit Calculator from the list.
3. Enter the details: Input the monthly deposit amount, tenure (in months), and the current interest rate.
4. Calculate: Click on the ‘Calculate’ button to see the maturity amount.

The calculator provides a clear picture of the returns, helping you plan your investments better.

You may also want to know Axis Bank RD Interest Rates

Benefits of Opening an RD Account in Union Bank

1. Flexible Deposit Amounts: Union Bank offers flexibility with a low minimum monthly deposit of ₹50, making it accessible for all income levels to start saving.

2. Customizable Tenure: You can choose the RD tenure based on your financial goals, ranging from 6 months to 10 years, offering both short-term and long-term savings plans.

3. Guaranteed Returns: With a Union Bank RD, you get fixed and assured returns since the interest rate remains constant throughout the tenure, providing security against market fluctuations.

4. Higher Interest Rates for Seniors: Senior citizens benefit from higher interest rates on RD accounts, typically 0.50% more than the regular rate, ensuring better returns for elderly customers.

5. Nomination Facility: Union Bank provides a nomination facility, allowing you to assign a nominee who will receive the maturity proceeds in the event of an unforeseen circumstance.

6. Loan Facility Against RD: Union Bank allows you to take a loan against your RD account balance, offering up to 90% of the RD value in case of emergencies without breaking the RD.

7. Automatic Renewal: If you don’t withdraw the RD amount on maturity, Union Bank offers an auto-renewal facility, where the RD is renewed for the same tenure at prevailing interest rates.

8. No TDS Deduction: Unlike some other investment products, Union Bank RD is not subject to TDS (Tax Deducted at Source) on the interest earned, unless it exceeds a certain limit.

9. Ease of Management: Union Bank offers easy access to managing your RD through internet banking and the Union Bank mobile app, allowing you to track deposits and interest earned in real-time.

10. Joint RD Accounts: You can open a joint RD account with Union Bank, enabling you and a co-account holder to save together systematically, which is ideal for family savings plans.

How to Open an RD Account in Union Bank?

Opening a Recurring Deposit (RD) account with Union Bank is a simple process that can be done either online or by visiting a branch. Here’s a detailed guide explaining how to open an RD account in Union Bank, highlighting unique features that make the process convenient.

1. Eligibility Criteria

Before opening an RD account in Union Bank, ensure you meet the following eligibility criteria:

• Individuals: Any Indian resident with a Union Bank savings account is eligible to open an RD.
• Joint Accounts: Joint accounts can also be opened with family members.
• Minors: An RD account can be opened for minors under the supervision of a parent or guardian.

2. Open an RD Account Offline – Visit a Branch

Step 1: Visit the Nearest Union Bank Branch

To open an RD account offline, you can visit any nearby Union Bank branch with the necessary documents, such as identity proof and address proof (Aadhaar, PAN card, etc.).

Step 2: Fill in the RD Application Form

Request the RD account opening form at the bank and fill in all required details. This includes information like your monthly deposit amount (starting at ₹50), the tenure (6 months to 10 years), and personal details.

Step 3: Submit KYC Documents

Submit the required Know Your Customer (KYC) documents:

• Identity Proof: Aadhaar, PAN card, passport, or voter ID.
• Address Proof: Aadhaar, passport, driving license, or utility bills.

Step 4: Make Your Initial Deposit

After completing the form and submitting your documents, make your first deposit. Union Bank requires a minimum deposit of ₹50, allowing you to customize it according to your financial ability.

Step 5: Receive Confirmation and Passbook

Upon successful registration, you’ll receive an RD passbook or account confirmation from the bank, showing details of your monthly deposit, tenure, and applicable interest rate.

3. Open an RD Account Online – Using Union Bank Internet Banking

Union Bank provides a convenient online option to open an RD account via Net Banking.

Step 1: Log in to Union Bank Internet Banking

Visit the Union Bank Net Banking portal and log in using your customer ID and password. If you don’t have a Net Banking account, you can register online using your account details.

Step 2: Navigate to the ‘Deposit’ Section

Once logged in, go to the ‘Deposits’ section in your Net Banking dashboard. Select the option to open a Recurring Deposit.

Step 3: Enter Deposit Amount and Tenure

Choose the amount you wish to deposit every month, starting with a minimum of ₹50. Select the RD tenure from 6 months to 10 years, based on your financial goals.

Step 4: Set Up Auto-Debit

Union Bank allows you to set up an auto-debit facility, linking the RD account to your existing savings account. The monthly RD amount will automatically be debited from your savings account on a fixed date each month.

Step 5: Review and Submit

Double-check all your details, including the monthly deposit amount, tenure, and auto-debit setup. Once confirmed, submit your request. You will receive a confirmation notification via email or SMS, and your RD account will be successfully opened.

4. Open an RD Account Using Union Bank Mobile App

Union Bank also offers an option to open an RD account via their mobile app, providing a seamless process for users who prefer mobile banking.

Step 1: Download and Log In to the Union Bank Mobile App

If you haven’t already, download the Union Bank mobile app from the Google Play Store or Apple App Store. Log in using your registered mobile number or customer ID and password.

Step 2: Go to the ‘Deposits’ Section

Navigate to the ‘Deposits’ section within the app and select the option to open a Recurring Deposit.

Step 3: Choose Deposit Amount and Tenure

Enter the desired monthly deposit, starting at ₹50, and select the RD tenure, which can be anywhere from 6 months to 10 years.

Step 4: Confirm and Set Auto-Debit

Review your RD details and set up an auto-debit mandate from your savings account to make monthly deposits automatically. Confirm your request, and you’ll receive confirmation via the app.

5. Add a Nominee

During the RD account opening process, Union Bank allows you to add a nominee either online or offline. This ensures that the maturity proceeds will go to the nominee in case of the depositor’s death, offering added security for your investment.

6. Track and Manage Your RD

After opening your RD account, you can easily track and manage your deposits using:

• Internet Banking: Access and monitor your RD account through Union Bank’s online portal, viewing deposit history and interest earned.
• Mobile App: The Union Bank mobile app allows you to check your RD account balance and manage your monthly deposits on the go.

7. Premature Withdrawal

Union Bank allows premature withdrawal of RD funds before the end of the tenure, but it may result in penalties or loss of interest. However, the option provides flexibility in case of urgent financial needs.

Union Bank RD Interest Rates for Senior Citizens

Union Bank offers special RD interest rates for senior citizens, which are typically higher than the standard rates. Senior citizens can earn an additional interest rate of 0.50% per annum over the regular rates. This additional benefit makes RD accounts a preferred investment option for senior citizens seeking stable and higher returns.

Tax Implications of Union Bank RD Interest

The interest earned on Union Bank RD accounts is subject to tax under the Income Tax Act, 1961. The interest income is added to the account holder’s total income and taxed as per their applicable income tax slab. Additionally, if the interest earned exceeds Rs. 40,000 (Rs. 50,000 for senior citizens) in a financial year, Union Bank will deduct Tax Deducted at Source (TDS) at 10%.

However, account holders can submit Form 15G/15H to request non-deduction of TDS if their total income is below the taxable limit.

Comparison of Union Bank RD Interest Rates with Other Banks

Union Bank RD interest rates are competitive when compared to other banks. Here is a brief comparison with a few other leading banks:

• State Bank of India (SBI): Offers RD interest rates ranging from 5.75% to 6.50% per annum.
• HDFC Bank: Provides RD interest rates between 5.50% and 6.75% per annum.
• ICICI Bank: Offers RD interest rates from 5.50% to 6.75% per annum.
• Axis Bank: RD interest rates range from 5.75% to 6.75% per annum.

While the rates are fairly similar across banks, the choice of bank may depend on factors like customer service, online facilities, and additional benefits like loan options.

How to Maximize Returns on Your Union Bank RD Account

To maximize returns on your Union Bank RD account, consider the following tips:

1. Opt for Longer Tenures: Longer tenures generally attract higher interest rates.
2. Regular Deposits: Ensure timely monthly deposits to avoid penalties and interest loss.
3. Leverage Senior Citizen Rates: If eligible, take advantage of the higher interest rates for senior citizens.
4. Use the RD Calculator: Plan your investments using the RD calculator to understand potential returns.
5. Reinvest Interest: Consider reinvesting the interest earned to compound your returns further.

Conclusion

Union Bank RD accounts are an excellent investment option for individuals looking to save systematically and earn assured returns. With competitive interest rates, flexible tenures, and various benefits, Union Bank RD accounts cater to the diverse needs of savers. By understanding the current Union Bank RD rate of interest, using the RD interest rate calculator, and following best practices, you can maximize your returns and achieve your financial goals.

For the latest updates and personalized advice, consider visiting your nearest Union Bank branch or checking the official Union Bank website.