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Union Bank FD Interest Rate

>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...Read More

Union Bank of India Fixed Deposit Interest Rates

Note: All interest rates are updated as of 30 Jan 2024
TenureFor General Citizen (p.a)For Senior Citizen (p.a)
7 days to 14 days3 %3.5 %
15 days to 30 days3 %3.5 %
31 days to 45 days3 %3.5 %
46 days to 90 days4.05 %4.55 %
91 days to 120 days4.3 %4.8 %
121 days to 180 days4.4 %4.9 %
181 days to less than 1 year5.25 %5.75 %
1 year6.75 %7.25 %
>1 year to 398 Days6.75 %7.25 %
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399 Days
7.25 %7.75 %
400 Days to 2 year6.5 %7 %
> 2 year to 3 years6.5 %7 %
> 3 Year to 5 years6.5 %7 %
>5 Years to 10 Years6.5 %7 %

Types of Union Bank Of India Fixed Deposits

  • Standard FD: A standard FD can be started with a minimum investment of ₹1000 for a period ranging from 7 Days to 10 years. This is usually the preferred FD option chosen by investors. Investors can also avail of loans against their FDs.
  • Special FD: Special FDs are named so as these are usually launched for a special time period. These FDs offer lucrative and higher interest rates than Standard FDs and are popular among investors. Union bank keeps launching Special FDs for different durations and currently, the bank has Special FDs for 400 days, 599 days and 700 days.
  • Union Tax Saver: Unlike standard FDs, investors can not withdraw their deposits before 5 years but can avail of income tax deduction under section 80C up to 1.5 lakhs in a year. Loans against this scheme can only be availed after the completion 5 years of the lock-in period. 
  • Cumulative 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 installments and provides compounded interests on the amounts saved. Investment has to be made for a minimum period of 6 months with  no penalty being charged on premature closure.
  • Monthly Income Scheme: This scheme provides simple interest and facilitates the monthly payout of the interest earned. This deposit requires a minimum investment of ₹1,000 and then in multiples ₹100 for a minimum period of 1 year up to 10 years with the facility of auto-renewal. This scheme is generally preferred by senior citizens and others who require a steady stream of cash flows.
  • Deposit Re-Investment Certificate: This is an ideal scheme for investing a lump sum amount providing the benefits of compounding by reinvesting the interest earned on a quarterly basis. The minimum deposit amount under this scheme is ₹1,000 for a minimum period of 6 months up to 10 years. One can also avail loan on these deposits.
  • Money Flex Term Deposit: 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 deposit amount under this scheme starts from ₹25,000 for a period of at least 6 months up to 10 years. Depositors can not avail loans against this scheme.
  • Union Callable Term Deposit Scheme:  This scheme is for deposits of over ₹2 crore for the period of 61 days to 3 years wherein 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.

Pros and Cons of Investing in Union bank’s FD

Pros:

  • One can make investments of very small amounts hence promoting savings.
  • One can save tax by investing into 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.

Cons:

  • Interest earned on fixed deposits are not tax-free and are subject to tax as per your applicable income tax slab rate.
  • In some cases, banks deduct TDS at the time of payment of interest. Hence, if the individual has income below the basic exemption limit as defined under the Income-tax Act and is not liable to pay any income tax, he/she will still have to file the Income Tax return to claim the refund of TDS deducted by the bank.
  • Historically Fixed Deposits have given lower returns as compared to Mutual Fund and equity instruments.

Union bank’s FD 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 Rs. 1000/-,  in cumulative deposit scheme it is as low as Rs 50 also. 

Documents required for Union Bank’s FD account

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

  • For Identification Proof – 
    • PAN Card 
    • Driving License 
    • Passport 
    • Voter’s ID 
    • Aadhar Card
    • Govt./Defense ID card or ID Card issued by a Reputed employer.
  • For 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
    • For 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 case of Pensioner
  • For Minors: Birth Certificate issued by Gram Panchayat / NAC (Notified Area Committee) / Municipal corporation.
  • Two recent passport-size photographs of account holders.

Note- The above requirements are waived if the customer is already an account holder of the Bank

How to Open an FD with Union bank

1. 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):

Step 1: Log in to the Union ‘vyom’ mobile application 

Step 2: Click on ‘Open FD’ in the Quick Task section. By this, you will get an online form in which you will be required to 

Step 3: Select the FD tenure and insert the deposit amount. After filling the form once can submit the details and create an FD.

  • Using Union Internet banking website:

Step 1: Login to the Union Internet Banking website 

Step 2: Navigate to the “Online Deposit” tab. 

Step 3: 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. 

Step 4: After filling the form one can submit the details and create an FD.

  • Offline by visiting nearest Branch:

Step 1: Visit nearest Union bank branch

Step 2: Obtain and fill up the form to create a Fixed Deposit indicating the period, amount and other preferences

Step 3: Submit the form along with a copy of your Aadhar and Pan card; the bank officials would process the form and create an FD.

 

2. 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.

3. 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.

Tax implications on Union bank’s Fixed Deposits

The Tax applications remain the same irrespective of the bank in which you open the fixed deposit.

  • The interest earned on Fixed Deposit is taxable in the hands of an individual (age less than 60 years). The tax is levied as per the normal tax slab applicable for such individuals.
  • In the case of a senior citizen (Age above 60 years), a deduction of up to Rs 50,000 is available under section 80 TTB.
  • In case of a 5-year tax saving fixed deposit, you will be entitled to a deduction under section 80C of the Income Tax Act, wherein the deduction would be equal to the amount deposited during the Financial year with the maximum threshold limit of Rs 1,50,000. (This benefit is not available for individuals who opt for a New Tax Regime)

Tax rates on interest

TDS is deducted as per IT rules on interest earned more than ₹ 40,000/- per annum (₹  50,000 for resident senior citizens) during the financial year @ 10% as per Section 194A of the Income-tax Act,1961..

However, if your total income is below the taxable limit, you can submit Form 15G or Form 15H (For senior citizens) to the bank and request them not to deduct any TDS.

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.

How is a tax-saver FD different from a regular FD?

A tax-saving FD has a lock-in period of 5 years. No premature withdrawals, overdrafts, or loan facilities are available under a tax-saving FD. Whereas one can have a regular FD for any tenure as per the choice of an individual and they are eligible for premature withdrawals

How can I break my Union bank FD?

Offline: Place a request at your nearest Union bank Branch. With this method, the amount will be credited to your account within 24-48 hours.
Online: Log in to the app or website and open the FD that you want to break, click on Premature Withdrawal and the amount will be credited within the same day.

Does Union bank offer Sweep Facility for FDs?

Yes, Union bank has a sweep facility. Any balance in excess of the minimum specified balance (in multiples of ₹ 10,000) in the ‘Savings Flexi Deposit Scheme’ will be swept out to form an FD with no premature-penalty clause.

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Union Bank of India

Calculate Union Bank of India FD Returns

₹1,00,000
399 Days
7 days to 14 days15 days to 30 days31 days to 45 days46 days to 90 days91 days to 120 days121 days to 180 days181 days to less than 1 year1 year>1 year to 398 Days399 Days400 Days to 2 year> 2 year to 3 years> 3 Year to 5 years>5 Years to 10 Years
7.25 %
Yes
No
Maturity Amount₹1,07,925

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