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Union Bank of India Fixed Deposit

Updated 06 Dec 2023

Union Bank of India is a leading public sector bank established in 1919 in Mumbai with a majority shareholding of the Government of India. Recently, Andhra Bank & Corporation Bank have been amalgamated into Union Bank. Post amalgamation, the bank has more than 8700 branches all over India, along with an international presence. This article provides more insight into the fixed deposit schemes of Union Bank.


Fixed Deposits (FDs) are a secured way of investing wherein money can be deposited for a fixed period of time at a predetermined fixed rate of interest which is usually higher than a savings bank account.

Types of Union Bank Of India Fixed Deposits

Below are the Types of FDs offered by Union Bank of India:

  1. Standard Fixed Deposits
  2. Special Fixed Deposits
  3. Union Tax Saver FDs
  4. Cumulative Deposit Scheme
  5. Monthly Income Scheme
  6. Deposit Re-Investment Certificate
  7. Money Flex Term Deposit
  8. Union Callable Term Deposit Scheme

Benefits of Union Bank of India Fixed Deposit Schemes

  • One can make investments of very small amounts hence promoting savings.
  • One can save tax by investing in tax-saving fixed deposits.
  • Using the online application of Union Bank, one can easily deposit in a fixed deposit account by opening an account with the bank.
  • Senior citizens are offered additional interest rates, which are often up to 0.75% more than that for regular citizens.
  • The amount invested with the Bank is covered by DICGC insurance for the total sum of ₹ 5 lakhs.

Features of Union Bank Fixed Deposits

Standard Fixed Deposit Scheme

  • A standard FD can be started with a minimum investment of ₹1000.
  • The period of FD ranges from 7 days to 10 years.
  • Investors can avail of loans against the Standard Fixed Deposits offered by Union Bank of India.

Special Fixed Deposit Scheme

  • These FDs are usually launched for a special time period.
  • These FDs offer lucrative and higher interest rates than Standard FDs.
  • Union Bank keeps launching Special FDs for different durations.
  • Currently, the bank has Special FDs for 400 days, 599 days and 700 days.

Tax-Saver Fixed Deposit Scheme

  • You can invest up to  ₹1,50,000 per annum.
  • The minimum lock-in period is 5 years.
  • The amount invested is exempt from tax under section 80C.
  • You can avail loans against these FDs after the completion of 5 years.

Cumulative Fixed Deposit Scheme

  • This scheme is aimed to promote investment from lower/ lower middle/ middle/ upper middle and salaried sectors.
  • This scheme accepts investments from as low as ₹50/-, which encourages account holders to save in easy monthly instalments.
  • You will receive compound interest on the invested amount.
  • The minimum lock-in period is 6 months.
  • There are no penalty charges for premature closure.

Monthly Income Scheme

  • This scheme provides simple interest and facilitates the monthly payout of the interest earned.
  • The Monthly Income Deposit Scheme requires a minimum investment of ₹1,000 and then in multiples ₹100 for a minimum period of 1 year up to 10 years.
  • The facility of auto-renewal is available.
  • This scheme is generally preferred by senior citizens.

Re-Investment Certificate Scheme

  • This is an ideal scheme for investing a lump sum amount.
  • You can avail the benefits of compounding by reinvesting the interest earned on a quarterly basis.
  • The minimum deposit amount under this scheme is ₹1,000.
  • The period of FD ranges from 6 months to 10 years.
  • You can also avail loans on these deposits.

Money Flex Term Scheme

  • This scheme is designed to offer depositors higher returns on deposits by allowing the facility to withdraw a part of the deposit at any time before maturity without affecting the balance portion.
  • The minimum deposit required to invest in this scheme is ₹25,000.
  • The period of FD ranges from 6 months to 10 years.
  • Depositors can not avail loans against this scheme.

Callable Term Deposit Scheme

  • This scheme is for deposits of over ₹2 crore.
  • The tenure of the FD ranges from 61 days to 3 years.
    Premature closure is not allowed (except in exceptional circumstances).
  • Since premature closure is not allowed, this scheme offers a higher rate of interest than other FDs.

Eligibility Criteria

  • Any person in his individual capacity
  • more than one person in their joint names
  • any minor jointly with a major
  • Sole Proprietary concern
  • Members of charitable
  • Educational institutions
  • HUF
  • Clubs
  • Private Traders
  • Merchants
  • Agents
  • Professionals
  • Partnerships Firms
  • Societies & Corporates

Are eligible to open their fixed deposit accounts with Union Bank.
One can start a fixed deposit with a minimum investment of ₹1000/-,  in the cumulative deposit scheme, it is as low as ₹50 also.

Documents Required

Banks require the below-listed documents for completing the Mandatory Know Your Customer (KYC) procedure before opening an account for its customer

 

Identity Proof

  • PAN Card 
  • Driving License 
  • Passport 
  • Voter’s ID 
  • Aadhar Card
  • Govt./Defense ID card or ID Card issued by a Reputed employer.

Address proof

  • Aadhar Card
  • Electricity Bill 
  • Telephone Bill 
  • Ration Card
  • Bank account statement
  • Letter from a reputed employer, Letter from any recognised public authority /local body, Income tax/wealth tax Assessment order

 

Date of Birth proof

Applicable for Senior Citizens & Minor only.

 

For Senior Citizens ( any one of the following) : 

  • Passport
  • Voter ID Card
  • Driving License
  • PAN Card
  • Service Discharge Certificate
  • PPO in the case of Pensioner
  • Two recent passport-size photographs of account holder.

For Minors

  • Birth Certificate issued by Gram Panchayat / NAC (Notified Area Committee) / Municipal corporation.
  • Two recent passport-size photographs of account holder.

How to Open a Union Bank of India Fixed Deposit Account

If you already hold a Savings or Current Account with Union Bank, a Fixed Deposit can be opened using the below procedure.

 

Using Union Bank Mobile Application (App)

  • Log in to the Union ‘vyom’ mobile application 
  • Click on ‘Open FD’ in the Quick Task section. By this, you will get an online form in which you will be required to 
  • Select the FD tenure and insert the deposit amount. After filling out the form, you can submit the details and create an FD.

Using Union Internet banking website

  • Log in to the Union Internet Banking website
  • Navigate to the “Online Deposit” tab.
  • From the menu, select “Fixed Deposits opening”. This will generate an online form in which you will be required to select the FD tenure and insert the deposit amount.
  • After filling out the form, one can submit the details and create an FD.

Offline by visiting the nearest Branch

  • Visit the nearest Union Bank branch
  • Obtain and fill up the form to create a Fixed Deposit indicating the period, amount and other preferences
  • Submit the form along with a copy of your Aadhar and Pan card; the bank officials will process the form and create an FD.

If you are a new customer of Union Bank and do not hold any account, you can visit the nearest Union Bank with the Original PAN & Aadhar as well as the soft copy of the same. The bank official will help you to directly open an FD without having any savings / current account.

Also, there is an option to create a savings/ current account with the bank and then open an FD using a Mobile application or Internet Banking Facility.

How to Close Union Bank of India FD?

Here are the various modes through which you can break your FD.

 

Offline Withdrawal

  • Visit your nearest bank branch,
  • Place a request to withdraw your FD by filling out a form. 
  • This method will credit the amount to your account within 24-48 hours.

Online Withdrawal

  • Log in to the app or website,
  • Choose the FD that you want to break, 
  • Click on Premature Withdrawal,
  • And the amount will be credited within the same day.

Premature Withdrawal of Union Bank FDs

  • A penalty of 1% will be levied on the applicable rate for deposits closed prematurely. Such closures include withdrawals through sweep-ins and partial withdrawals as well.
  • No interest will be paid if the deposit is held for a tenure of below 7 days.

FAQs

When is the right time to invest in an FD?

One can invest in Fixed Deposits when interest rates are high or when someone has retired and aims to have a safe investment.

Why should I invest in fixed deposits when other investment instruments are offering better returns?

Investing in a Fixed Deposit is a liquid asset and can be beneficial in emergency situations. For example, in a bear market when equity investments are down and you are in the need of money, premature FD withdrawal can be more beneficial than withdrawing investments by incurring losses.
It is also a good investment to have post-retirement so that the money can be used in case there is a medical emergency.

Is the ₹ 5 lakh DICGC insurance cover applicable separately for every bank?

Yes, for such extreme situations, each depositor is insured up to a maximum of ₹5 lakh (for both principal and interest). In case you have multiple fixed deposits with several banks, the insurance coverage cap is separately applied to the amount in every bank.

Disclaimer: Wint Wealth makes no guarantee or warranty on the accuracy of the data provided on this site, the information displayed is subject to change and are provided on an as-is basis. Nothing contained herein is intended to or shall be deemed to be investment advice, implied or otherwise. You are advised to make your own enquiries, consult a professional advisor and verify the information prior to taking any investment decisions. We accept no liability for any loss arising from the use of information contained on this website.

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