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Indian Overseas Bank (IOB) RD Interest Rates 2024

Last Updated : 12 Feb, 2024
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A recurring deposit plan from Indian Overseas Bank enables salaried or rural savers to make small investments and earn returns. With the help of this strategy, one can achieve financial objectives like getting married or sending their kids to college. The period of the investment and the number of installments are of the depositor’s choice. Additionally, lending facilities are provided by Indian Overseas Bank against recurring deposits.

Indian Overseas Bank is a major public sector bank that was nationalized by the Indian government in 1969. It has a significant presence, with 3,220 domestic branches, 4 overseas branches, a representative office, and two digital banking units. The bank offers a variety of financial goods and services, including recurring deposits. With Indian Overseas Bank’s RD interest rates, investing in recurring deposits is both profitable and safe.

Indian Overseas Bank RD Interest Rates 2024

Tenure

Rate of Interest for General Citizens 
(Below 60 Years of Age)

Rate of Interest for Senior Citizens 
( Above 60 Years of Age)

Interest for Super Senior Citizens

180 to 269 days 4.95%5.45%5.70%
270 days to less than 1 year5.35%5.85%6.10%
1 year to less than 2 years6.80%7.30%7.55%
444 days7.10%7.60%7.85%
2 years to less than 3 years6.80%7.30%7.55%
3 years and above6.50%7.00%7.25%

Features of Indian Overseas Bank Recurring Deposit

1. Initial Investment: The minimum monthly installment is ₹50 and subsequent payments are in multiples of 5.

2. Limit: The maximum monthly installment amount has no upper limit.

3. Tenure: The term can be as short as six months (and then in increments of three months) or as long as ten years.

4. TDS Deduction: Yes, under the Income Tax Act of 1961, the interest generated on the RD account is taxable. If the total predicted interest exceeds ₹1000 in a fiscal year, TDS is deducted, i.e. 10% if the PAN information is given and 20% if PAN details are not given.

5. Set-Up Standing Instructions: Paying the monthly payments (for RD) is as simple as with a one-time standing instruction from your Indian Overseas Bank Savings Account.

6. Premature Withdrawals: Premature withdrawals from an Indian Overseas Bank RD are permitted. However, the bank doesn’t allow partial withdrawals.

7. Overdraft Facility: It offers Loan/Overdraft facility up to 95% of the deposit amount

How to Open an RD Account in an Indian Overseas Bank?

Individuals can open an Indian Overseas Bank Recurring Deposit account.

1. Offline Process

Collect all of the documentation required for opening an Indian Overseas Bank RD account and go to a local bank to request the intimation procedure. Throughout the application process, you will be assisted by an Indian Overseas Bank representative. It is advised that you bring photocopies of your documentation with you.

2. By Net Banking

  • Go to the official website of Indian Overseas Bank.
  • Hover over the ‘Login’ button at the top of the page. Select ‘Login’ from Internet Banking’s ‘Personal’ section.
  • Select “Create Recurring Deposit.”
  • Complete the form with the depositor’s and nominee’s details, if suitable.
  • Once confirmed, the deposit amount will be deducted from the customer’s savings account, and a receipt will be emailed (for those who have registered for e-statement) or sent to the customer via post.

3. By Mobile Banking

  • Open Indian Overseas Bank Mobile, the bank’s mobile application.
  • Click on the ‘Open RD’ button.
  • Upon confirmation, the chosen amount will be deducted from the associated savings account and an RD account will be opened promptly.

If you have opted for an e-statement, you will receive a confirmation email; otherwise, a physical statement will be sent to you.

How to Calculate RD Interest Rates in Indian Overseas Bank?

The RD interest rates on Indian Overseas Bank recurring deposits are compounded quarterly. This is the formula to calculate the maturity value.

A=P(1+\frac{R}{N})^{(Nt)}

Here,

  • A Represents the Maturity Amount,
  • P Represents the Recurring Deposit,
  • R represents the Rate of Interest,
  • T Represents the Tenure,
  • N represents the number of compounding interests.

Example:

Akash deposits ₹500 each month for 9 months. The rate of interest applicable to Recurring Deposit accounts is 4.65% for regular RD. What will be the sum on maturity?

Solution:

A=P(1+\frac{R}{N})^{(Nt)}

A=4500(1+\frac{4.65}{3})^{(3\times \frac{9}{12})}

A = ₹4,588

Hence, the interest income will be generated from the recurring deposit is ₹88.

Eligibility Criteria to Start RD Account with Indian Overseas Bank

1. The person applying must be an Indian resident or a member of a HUF (Hindu Undivided Family).

2. NRIs can open an RD account using their NRO or NRE accounts.

3. A minor can open an Indian Overseas Bank RD account under parental guardianship to look after your funds.

Documents Required for Starting an RD Account

For Opening an RD in Indian Overseas Bank Investors must ensure that they have the following documents with them :

1. Proof of Identity

  • Pan card
  • Voter ID
  • Aadhaar card
  • Ration card including a photograph
  • Driving license
  • Senior citizen ID
  • Passport

2. Proof of Address

  • Electricity bill
  • Telephone bill
  • Bank statement with cheque
  • Passport
  • Identity card issued by Post Office

Types of Indian Overseas Bank RD Accounts

1. IOB Recurring Deposit

This is Indian Overseas Bank’s regular recurring deposit. It is for Indian people who want to profit from a significant sum of money but can only invest small amounts every month.

Investment Amount

Minimum Deposit: ₹50/month 
Maximum Deposit: No upper limit

Tenure

6 months to 10 years

Nomination

Available

Overdraft Facility

It offers a Loan/Overdraft facility of up to 95% of the deposit amount

Eligibility

Indian residents 

2. IOB Flexi Recurring Deposits

This RD scheme is also available to resident Indians. It is subject to certain specifications, such as minimum and maximum monthly installments, and there is no limit on the number of credits available every month.

Investment Amount

Minimum Deposit: ₹1000/month

Maximum Deposit: The monthly deposit amount can only be extended up to three times the primary installment, with a maximum of ₹100000/month.

Tenure

12 months – 120 months

Nomination

Available

Overdraft Facility

It offers a Loan/Overdraft facility up to 95% of the deposit amount.

Eligibility

Indian residents, minors, joint stock companies, clubs, educational institutions and associations, senior citizens,  partnerships

Indian Overseas Bank RD Premature Withdrawal Rules

Premature choices for withdrawals were offered by Indian Overseas Bank for its recurring deposits. If the depositor chooses to withdraw the deposited money prior to the specified period of time, there will be a 1% deduction from the appropriate interest rate based on the selected RD plan. There is no facility for partial withdrawal.

Indian Overseas Bank RD Penalty

Depositors have to pay the following penalty charges,

Deposits Penalty 
Up to ₹15,000NIL 
Ranging from ₹15,001 to ₹5 lakhs0.50% 
Ranging from ₹5 lakhs to ₹2 crores1.00%
Bulk Deposits of ₹2 crores and above 1.00%

Frequently Asked Questions (FAQs)

1. What is the eligibility for opening an IOB RD account?

Answer:

Any Indian resident, including Hindu Undivided Families. Furthermore, NRIs can also open an RD account using their NRO and NRE accounts. Bank also offers an RD plan for minors (under the age of ten) under the supervision of their parents to help them manage their finances.

2. Is there a lock-in period for the IOB RD account?

Answer:

Yes, the minimum lock-in period is three months, and if the account user withdraws the funds before that time, the bank pays no interest and refunds the principal amount to the source.

3. Does IOB allow partial withdrawals from the RD account?

Answer:

No, the Indian Overseas Bank does not permit partial withdrawals of RDs.

4. Is a nomination option available in the IOB RD scheme?

Answer:

Yes, Indian Overseas Bank offers nomination services with all forms of recurring deposit plans.

5. Can I start a Flexi RD with a minimum duration of six months?

Answer:

No, the minimum term for a Flexi RD with IOB is 12 months.



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