Bank of India FD Interest Rate
On September 7, 1906 a group of eminent businessmen from Mumbai with a paid-up capital of ₹50 lakhs and 50 employees founded the Bank of India. The Bank was under private ownership and control till July 1969 when it was nationalised along with 13 other Banks. Today it has over 5100+ branches in India across all states and Union Territories including specialised branches.
Interest Rates Chart 2023
|Tenure||For General Citizens (p.a.)||For Senior Citizens (p.a)|
|7 days to 14 days||3%||3.5%|
|15 days to 30 days||3%||3.5%|
|31 days to 45 days||3%||3.5%|
|46 days to 90 days||4.5%||5%|
|91 days to 179 days||4.5%||5%|
|180 days to 269 days||5%||5.5%|
|270 days to less than 1 year||5.5%||6%|
|Above 1 Year to less than 2 Years||6%||6.5%|
|2 Years to less than 3 Years||6.75%||7.25%|
|Note: All interest rates are updated as of 1st Aug 2023|
returns on FD
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8.61% before they go down
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All you need to know about Bank of India FD Interest RateTypes of Bank of India Fixed DepositsCurrent Deposits Plus SchemePros of investing in Bank of India fixed depositsCons of investing in Bank of India fixed depositsBank of India Fixed Deposit Eligibility Criteria Documents required for Bank of India Fixed DepositHow to open a fixed deposit account with the Bank of India?Bank of India Fixed Deposit Premature WithdrawalTax implications on Bank of India FDHow to claim tax benefits?
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Types of Bank of India Fixed Deposits
Fixed Deposits are a secured investment instrument in which a lump sum amount is deposited for a fixed tenure at a predetermined rate of interest. The interest rate offered under fixed deposits is higher than in saving bank accounts. Let's know more about the types of FD Bank of India offers:
Star Monthly Income Fixed Deposit
Minimum investment amount is ₹10,000 in metro and urban branches and ₹5,000 in rural and ₹5,000 in semi-urban branches for senior citizens. The maximum tenure for deposit under this scheme is 10 years. Payment of interest can be done monthly or quarterly. Monthly interest payments will be done at a discounted rate.
Star Quarterly Income Fixed Deposit
Under this scheme, the minimum investment amount is ₹10,000 in metro and urban branches and ₹5,000 in rural and ₹5,000 in semi-urban branches for senior citizens. Payment of interest is on a monthly or quarterly basis, as desired by the depositor. Depositors may receive interest every month at a monthly discounted value. The maximum tenure for deposit under this scheme is 10 years.
Star Double Benefit Term Deposit
This scheme is useful if the investment period is between 6 months to 10 years. The minimum investment amount is ₹10,000 in metro and urban branches and ₹5,000 in rural and ₹5,000 in semi-urban branches for senior citizens. It provides a higher yield on principal as the interest is compounded on a quarterly basis. The accrued interest, compounded quarterly, is paid on maturity along with the principal amount. However, depositors may request premature withdrawal of deposits. Repayment of term deposits before maturity is permissible in terms of the directives of the Reserve Bank of India issued from time to time.
Star Sunidhi Tax Saving Deposit Scheme
Only individuals and HUFs having PAN are eligible to deposit in this scheme. The depositor is entitled to claim tax benefits of up to ₹1.5 lakhs in a given financial year, under section 80C of the Income Tax Act of 1961. The minimum amount of deposit in this scheme is ₹10,000 and the maximum amount acceptable under this scheme is ₹1.5 lakhs per annum. The minimum duration of the deposit is 5 years and the maximum is 10 years. Since there is a lock-in period of 5 years, premature withdrawal is not permissible. However, in case of the death of the depositor premature withdrawal is permissible even during lock-in the period. The depositor cannot avail loan against the amount of the deposit. In the case of a joint account, only the first holder is entitled to a tax benefit. Senior citizens will get 0.5% extra interest on deposits.
Fixed/Short Term Deposit
Under this scheme, the deposits are repayable within 6 months. In case the terminal month is incomplete interest will be paid for the actual number of days on the basis of 365 days in a year. The depositor is required to open a savings bank account where the interest from the fixed deposit will be credited. Premature withdrawal of deposit is permissible with applicable penalty.
Current Deposits Plus Scheme
It is a deposit product which combines current and short deposit accounts. It has facilities of sweep in and sweep out to take care of withdrawals.
- Depositor needs to maintain a minimum average quarterly balance of ₹5 lakhs in the current deposit account and ₹1 lakh in the short deposit account. There is a penalty of ₹1,000 per quarter if the average quarterly balance falls short of minimum average quarterly balance.
- Amount in excess of ₹5 lakhs in current deposit account will be transferred to short term deposit account in multiples of ₹1 lac. The deposit is to be made for minimum tenure of 7 days and maximum tenure of 90 days. Sweeping out from current deposit account to short term deposit account will be on 1st and 16th of every month.
- In case there is urgent need of funds in current deposit account funds in the multiple of ₹1 lakh will be swept in from a short term deposit account in the multiples of ₹1 lakh, on Last In First Out (LIFO) basis subject to the availability of the funds. Payment before maturity is allowed without any penalty in order to meet shortage of funds subject to availability of funds.
- Interest will be paid on the short deposit component only, as per maturity period.
- Automatic renewal facility is available for the original tenure and amount of deposit.
Pros of investing in Bank of India fixed deposits
- Flexibility to choose interest payout frequency i.e monthly, quarterly also it can be renewed at the end of the maturity.
- The bank allows premature withdrawal of deposits subject to penalty.
- In case the depositor does not want to prematurely withdraw a fixed deposit then they can also consider taking loan/overdraft against fixed deposits as an alternative funding option.
- Deposit Insurance and Credit Guarantee Corporation (DICGC) grants insurance cover for fixed deposits. The maximum amount of insurance coverage is ₹5 lakhs.
- Depositors can invest in Star Sunidhi Tax Saving Scheme and claim deductions up to ₹1.5 lakhs under section 80C of the income Tax Act of 1961. However, there is a lock-in period of 5 years in this scheme.
- One can easily make a fixed deposit by using internet banking.
- Bank of India also launched door-step banking in which they offer delivery facility of term deposit advice.
- They offer additional interest to senior citizens which is 0.5% higher than normal rates for specified tenure.
Cons of investing in Bank of India fixed deposits
- Not dynamic: Interest rates on FD are not dynamic. So, it fails to overcome the risk of inflation.
- Fixed rate: Fixed deposits offer a fixed rate on the investment. Hence, no benefit can be availed for higher returns in cases of an increase in market interest rates.
- Penalty: There is a penalty for premature closure which lowers the return received on fixed deposit.
Bank of India Fixed Deposit Eligibility Criteria
- Any person in his individual capacity or more than one person in their joint names, any minor jointly with a guardian can open a deposit with the Bank of India.
- Sole proprietary concerns,
- Partnership firms,
- Limited companies,
- Associations, clubs, societies, etc.
- Joint hindu families (accounts of non-trading nature only),
- Government and Quasi-Government Bodies,
- Religious institutions,
- Educational institutions (including Universities),
- Charitable institutions are eligible to make deposits with the Bank of India.
Documents required for Bank of India Fixed Deposit
Know Your Customer (KYC) norms are mandatory for bank fixed deposits. The following documents are required to comply with KYC norms.
- Proof of identity: PAN Card, Driving Licence, Passport, Voter ID card, Aadhaar Card, Government/Defence ID card.
- Proof of residence: Aadhaar Card, Electricity Bill, Telephone Bill, Ration Card, Bank Account Statement, Letter from statutory authority/local body, Income Tax Order.
- Proof of date of birth: Since higher interest rates are offered to senior citizens a document stating the date of birth like a Passport, Voter ID card, Driving Licence, PAN Card, Aadhaar Card, Service Discharge Certificate, or PPO in case of a pensioner are submitted.
- Incase of minors: Birth certificate issued by Gram Panchayat/ Notified Area Committee/Municipal Corporation.
- Recent passport size photograph of the depositor.
How to open a fixed deposit account with the Bank of India?
For a depositor who is an existing account holder of the bank (having Savings or current account) fixed deposit can be opened using the following procedure:
By Logging into the Internet Banking
Step 1: Visit the Bank of India website, and navigate to the “Personal Login” tab. Provide username and password to log in.
Step2: Go to the “Fixed Deposit Tab”
Step 3: Enter all the details.
Step 4: Verify details and click confirm.
Step 5: Confirmation message will be displayed on the screen.
By using a Mobile App
Step 1: Download the Bank of India Mobile App and log in using your credentials.
Step 2: Select the 'Open FD' option from the app's main menu.
Step 3: Choose the type of deposit account you want to open, based on your preferences and requirements.
Step 4: Provide all the necessary details, including your personal information, nominee details, and payment and maturity instructions.
Step 5: After you have verified all the details, click on the 'Confirm' button to complete the transaction.
Step 6: Once the transaction is successfully completed, you should receive a confirmation message on the screen, indicating that your FD account has been opened.
Step 1: Visit the nearest branch office of Bank of India.
Step 2: Ask for a Fixed Deposit Application Form and fill in all the details.
Step 3: Submit all the documentary proofs.
Step 4: Deposit the money.
Step 5: Collect the Fixed Deposit Receipt.
Bank of India Fixed Deposit Premature Withdrawal
- Bank of India allows premature withdrawal of all FDs. For deposits below ₹5 lakhs, a penalty of 0.5% is charged for premature withdrawal before completion of 12 months.
- No penalty is charged for any withdrawals after the completion of 12 months. For deposits above ₹5 lakhs, a penalty of 0.5% is charged for premature withdrawal, irrespective of the completion of 12 months tenure.
Tax implications on Bank of India FD
As per the Income Tax Act of India of 1961, taxpayers can seek deductions under Section 80C if they invest in FDs.
In a given financial year, a taxpayer can avail tax deduction to a maximum of ₹1.5 lakhs from their gross taxable income, provided the following conditions are fulfilled:
- Taxpayers can invest in FD either through public or private sector banks.
- Individuals and HUFs can avail tax deductions by investing in tax savings FDs.
- Bank's five year tax saving FD offers exemptions under Section 80C.
- Investors cannot get loans against these FDs.
- In case of joint holders, only the first holder can get tax benefits.
How to claim tax benefits?
At the time of filing the Income Tax Returns (ITR), the taxpayer can provide supporting documents to avail tax benefits on FDs.
Tax Deducted at Source (TDS)
- TDS will be deducted on the interest accrued on the FDs if the interest is more than ₹40,000 (₹50,000 for senior citizens) in a given financial year.
- For Resident customers, If you have submitted your PAN card details then the deduction will be at 10% per year on the interest. Without a PAN card, the bank will deduct 20% TDS per year.
When is the right time to invest in Fixed Deposit?
The right time to invest in bank FDs depends on various factors such as the current interest rate scenario, the investor's financial goals, and the prevailing economic conditions. Typically, when interest rates are high, it may be a good time to invest in bank FDs as they offer higher returns.
What will happen if an incorrect PAN is furnished by the depositor?
If an incorrect PAN is furnished by the depositor, it may lead to tax implications. In this case, the bank would deduct TDS (Tax Deducted at Source) at the rate of 20%.
Is the ₹5 lakhs DICGC insurance cover applicable on Bank of India FD?
Yes. ₹5 lakhs Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance cover is applicable on Bank of India FD
Are there charges at the time of opening/maturity of Fixed Deposit?
There are no charges at the time of opening/maturity of fixed deposit. However, there is a penalty in the case of premature withdrawal. Moreover, the bank may deduct TDS at the rate of 10% if the amount of interest exceeds ₹40,000 (₹50,000 incase of senior citizens).
Disclaimer: The calculator and the results of the same are based on information inputted by you and extracted from third party sources. The information on this page is for illustrative purposes only and does not amount to any investment advice or recommendation. Wint Wealth has no commercial interest or gain in or from the actions resulting from the information displayed on this page. The information displayed on this page does not constitute an invitation to invest in any product nor is it a promise of performance. Interest rates are not updated in real time and you are advised to make your own enquiries, consult a professional advisor and verify the information prior to taking any investment decisions.