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Karnataka Bank Fixed Deposit

Updated 06 Dec 2023

Karnataka Bank Limited is a prominent 'A' Class Scheduled Commercial Bank in India, established on February 18, 1924, in Mangaluru, a coastal town in the Dakshina Kannada district of Karnataka State. The bank originated during the freedom movement of 20th Century India, reflecting the patriotic zeal that swept the nation. Over time, the Bank has expanded with the amalgamation of Sringeri Sharada Bank Ltd., Chitradurga Bank Ltd., and Bank of Karnataka.

 

Presently, the bank has a pan-India presence, with a branch network of 901 situated across 22 states and 2 Union Territories.

Types of Fixed Deposits in Karnataka Bank

  • Fixed Deposit
  • Soulabhya Deposit
  • Abhyudaya Cash Certificate 
  • Tax Planner

Benefits of Investing in Karnataka Bank Fixed Deposit

  • Period: The period of the FD with Karnataka Bank ranges from 1 week to a maximum of 10 years.  
  • Convenient: Having a savings account in Karnataka Bank allows one to open fixed deposits easily, and they can be liquidated whenever required.
  • DICGC insurance: The amount invested with the Karnataka Bank is covered by DICGC for the total sum of ₹5 lakhs. 
  • Minimum amount: Fixed deposits with Karnataka Bank can be opened with an investment as low as ₹100. 
  • Preference to senior citizens: Senior citizens who have reached the age of 60 years Karnataka Bank gives a monthly interest payment without any deductions.
  • Tax benefits: Karnataka Bank’s Tax Saving FD offers exemptions under Section 80C, of the Income Tax Act of 1961 thus helping to save taxes.   
  • Auto-renewal option: The Bank offers an auto-renewal option for their FDs. It means at the time of maturity of the FD, it gets renewed automatically. This is helpful for investors as they do not have to renew their FDs manually. 
  • Nomination facility: Depositors can nominate beneficiaries for their investments in Karnataka Bank FDs.

Features of Fixed Deposits in Karnataka Bank

Fixed Deposit

Karnataka Bank's fixed deposit scheme is ideal for individuals seeking regular income through interest payouts.

  • The tenure for the FD ranges from 7 days to 10 years
  • The minimum deposit amount is as low as ₹100. There is no maximum deposit limit for this scheme. 
  • The bank offers loan facilities to depositors; however, the terms and conditions of the bank are applicable.
  • Depositors can receive interest payouts quarterly, half-yearly, or yearly, as per their preference.
  • A monthly interest payout is available at a discounted rate. For monthly interest, the minimum deposit required is ₹5,000 and the minimum period of one year. However, there is no discounting of interest for Senior citizens (age 60 years and above).
  • Karnataka Bank also provides a nomination facility to the depositors, allowing them to nominate a beneficiary for their deposit.
  • Premature withdrawal is permitted under this scheme, but the bank's rules regarding the same are applicable. 
  • Based on the tenor, the interest rate ranges from 2.65% to 7.40% for the general public and 3.15% to 7.50% for senior citizens.

Soulabhya Deposit

This scheme is named the Twin Gain scheme. It is designed to provide convenience and flexibility to depositors. The scheme offers easy withdrawal of money, while the remaining balance earns interest at the contracted rate.

Depositors can choose between two options at the time of deposit, and once selected, the option is irrevocable.

Option 1:

  • Initial deposit accepted for 46/30 days or as decided. Deposit renewed automatically with interest for 38/59 blocks of 46/30 days each, until notified otherwise. Option chosen initially cannot be changed. Interest rate determined by Head Office at renewal. Deposit can be withdrawn in units of ₹1,000 during currency.
  • Interest rate for each renewal will be as per the rate prevailing on the renewal date, as decided by the Head Office. Interest will be calculated at the completion of each 46/30 day block.
  • The depositor can withdraw the deposit amount any time in multiples of ₹1,000 but no interest is paid in respect of units withdrawn before completion of the 30 days block. 
  • The depositor will obtain the consent letter of automatic withdrawal. 
  • Based on the tenor, the interest rate ranges from 2.65% to 7.40% for the general public and 3.15% to 7.50% for senior citizens.

Option 2:

  • The period of deposit is specified by the depositor, which can be minimum 3 months and maximum 60 months. 
  • Interest will be credited to the respective deposit account on a quarterly basis, with compounding done quarterly.
  • The rate of interest during the time of deposit will continue till the due date.
  • The depositor may withdraw the deposit amount in units of ₹1,000 as needed, before the agreed upon period.
  • The bank provides loan facilities to depositors under this scheme, but the terms and conditions of the bank are applicable.
  • Karnataka Bank offers a nomination facility to the depositors, allowing them to nominate a beneficiary for their deposit.
  • Based on the tenor, the interest rate ranges from 2.65% to 7.40% for the general public and 3.15% to 7.50% for senior citizens.

Abhyudaya Cash Certificate

The Abhyudaya Cash Certificate (ACC) scheme is suitable for investors who prefer a lump sum payout after a specific period and do not require regular interest payouts. This scheme reinvests the quarterly interest back into the deposit.

  • The tenure for this scheme ranges from 6 months to 10 years
  • The minimum deposit amount is ₹100, with multiples of ₹100 thereafter. There is no maximum limit for deposits under this scheme.
  • Under this scheme, quarterly interest accrued is ploughed back so that the deposit earns compound interest at quarterly intervals.
  • The bank offers loan facilities to depositors under this scheme, but the terms and conditions of the bank are applicable. 
  • Premature withdrawals are allowed under this scheme, but the bank's rules regarding the same are applicable. 
  • Karnataka Bank provides a nomination facility to the depositors, allowing them to nominate a beneficiary for their deposit.
  • Based on the tenor, the interest rate ranges from 2.65% to 7.40% for the general public and 3.15% to 7.50% for senior citizens.

Tax Planner

  • Karnataka Bank's Tax Planner scheme is one of the excellent options for investors who want to combine their investments with tax savings. 
  • This scheme provides tax benefits of up to ₹1.5 lakhs for the deposits made under Section 80C of the Income Tax Act of 1961.
  • The Tax Planner scheme is available in Fixed Deposit and Abhyudaya Cash Certificate schemes. 
  • If the depositor chooses the Fixed Deposit option, the interest will be paid every quarter or every month. In monthly interest payments, interest will be paid at a discounted rate as applicable to the domestic fixed deposit scheme.
  • If the depositor chooses the Abhyudaya Cash Certificate option, the interest will be payable at maturity, and interest will be compounded quarterly.
  • The lock-in period for this scheme is five years
  • The minimum deposit amount is ₹100, with multiples of ₹100 thereafter. Depositors can deposit a maximum up to ₹1.5 lakhs per annum to claim tax benefits.
  • Karnataka Bank does not offer loan facilities or premature withdrawals under this scheme. 
  • The bank provides a nomination facility to the depositors, allowing them to nominate a beneficiary for their deposit. 
  • Based on the tenor, the interest rate ranges from 2.65% to 7.40% for the general public and 3.15% to 7.50% for senior citizens.

Eligibility Criteria to Open a Fixed Deposit with Karnataka Bank

To invest in Karnataka Bank fixed deposits, the following are eligible:

  • Individuals
  • Proprietary concerns
  • Partnership firms
  • Private and Public Limited Companies
  • HUFs
  • Specified Associates
  • Societies
  • Trusts
  • Departments of Authority created by the Government (Central or State)
  • Limited Liability Partnership, etc.

Documents Required to Open a Karnataka Bank Fixed Deposit

The following documents are required to invest in Karnataka Bank fixed deposits:  

  • FD application form
  • Government-approved identity proof (PAN Card, Aadhar Card, Driving License, Voter ID, Passport)
  • Government-approved address proof (Aadhar Card, Voter ID, Electricity Bill, Telephone Bill)

How To Open A FD Account with Karnataka Bank

Fixed deposit accounts can be opened in both online and offline methods:

 

Online Method

  • Visit the official website of Karnataka Bank.
  • Login to the website
  • From digital banking tab choose ‘Internet Banking’ and then choose ‘Online fixed Deposit (FD/ACC/RD) account opening facility
  • Click on ‘Apply now’.
  • Fill out the required details and submit the form.
  • Enter the OTP received on the mentioned mobile number.
  • Click on ‘Confirm’.
  • The form is submitted, and a bank representative will contact you related to further proceedings.  

Offline Method

  • Visit the bank branch.
  • Take the FD application form.
  • Fill in the required details and submit the necessary documents.
  • Submit the form to the branch.

Karnataka Bank Fixed Deposit Premature Withdrawal

  • For premature closure of the term deposit, the depositors need to sign and submit the term deposit receipt along with the request letter
  • Presently premature closure penalty on domestic term deposits below ₹2 crores is waived.

FAQs

What are the Karnataka Bank FD rates?

Karnataka Bank offers interest rates ranging 4.5-7.3% per annum to the general public and are applicable for tenures that range from 7 days to 10 years. On the other hand, senior citizens can avail of higher interest rates that range from 6.3-7.7% per annum. These interest rates are applicable for tenures ranging from 1 year to 10 years.

What is the tenure of interest payment?

Bank offers monthly, quarterly, half-annual, yearly, and at-maturity interest payout choices for its FD plans.

Is the ₹5 lakhs DICGC insurance cover applicable on Karnataka Bank FD?

Yes. ₹5 lakhs Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance cover is applicable on Karnataka bank FD

What is the treatment of a Minor Fixed Deposit when they attain the age of majority?

For Minor Term Deposits, once the account holder attains the age of majority, they are required to verify the account balance. If the account was previously operated by their natural or legal guardian, the erstwhile minor must provide a new specimen signature and updated operating instructions. Additionally, the individual must submit a new photograph, complete KYC (Know Your Customer) documents, and fill out an account opening form at the branch.

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Karnataka Bank

Calculate Karnataka Bank FD Returns

₹1,00,000
6%
365
days
daysmonthsyears
Maturity Amount₹1,06,000

Understanding Fixed Deposit

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