Savings fund can be built in many ways. One of the ways to build up a savings fund for emergency requirements is by opening an RD account. AN RD account is a savings scheme, where you can deposit a certain amount each month over a period. The amount deposited by the individual earns interest over maturity. And the total savings along with the interest amount is paid back at the end of the tenure of the deposit. Two RD schemes are offered by the Union Bank of India: Cumulative Deposit and the Union Monthly Plus.
|Period||ROI (% P.A.)|
|181 day to 10 Month||6.95|
|10 Month to 14 Month||7|
|>14 Month to 3 Year||6.8|
|>3 year - 5 Year||6.8|
|>5 year - 10 Year||6.8|
Union Bank of India Cumulative Deposit account works like a regular deposit account and the minimum amount that can be deposited each month is 50 rupees. The tenure ranges for 6 months-120 months and after selecting the installment amount, it cannot be changed until the end of the deposit. The amount of interest is calculated each quarter. Customers also have an option of converting their Rda account into a fixed deposit account under one condition which states that the tenure of FD must be higher than the tenure of RD.
Individuals can open the Union Bank of India Monthly Plus RD accounts, members of HUF, trusts and institutions. The amount that can be deposited in these types of RD accounts ranges from 100 rupees-1 lakh. The deposit term for this RD scheme ranges from 6-60 months. You have an option to increase your principal amount to 10 times under this scheme. Even if you wish to step down from the core amount deposited initially, it is possible to do so through this RD scheme. Also, there are no penalties charged on premature closure of an RD account.
The short-term RD tenures range from 6 months-1 years. The interest rate that an individual can avail depends on the size of the deposit. Deposits amounting to less than a crore can earn interest rates ranging from 7%-7.75% per annum. Deposits ranging from 1-10 crore can earn interest rate ranging from 6.5%-7.65% per annum.
Medium Term deposits for Union bank range from 1-5 years an the interest rate applicable to these deposits range from 7.5%-7.7% per annum. Deposits between 1-10 crore can earn interest rate ranging between 5-10 years. Deposits amounting to less than a crore can earn an interest rate of 7.5% per annum.
Senior citizens who have an RD account with Union Bank are eligible for an additional interest rate of 0.5% per annum over the regular rate. This offer cannot be extended to NRI citizens and a person has to be above 60 years of age to avail this additional benefit.