With over 9 decades of quality service and a network of 904 branches across India, Karnataka Bank is currently an ‘A’ Class Scheduled Commercial Bank. Being a leading financial service institution in India, millions of customers find it safe to invest in recurring deposits with Karnataka Bank.
To learn about how to benefit from this secure investment instrument, go through this blog on Karnataka Bank RD interest rates.
| Minimum Investment | ₹50 |
| Tenure | 6 to 120 months |
| Interest Rates for General Citizens | 5.80% to 6.95% |
| Interest Rates for Senior Citizens | 6.20% to 7.35% |
| Loan Against Karnataka Bank RD | Available |
| TDS on RD | Available |
Karnataka Bank RD Interest Rates 2024
If you are looking for an investment scheme where you can deposit a minimal amount each month and earn guaranteed interest, a recurring deposit in Karnataka Bank is an ideal option.
Here is a chart with information on Karnataka Bank RD interest rates for general and senior citizens that are effective from 1st November 2023.
| Maturity Pattern | Interest Rate for General Citizens | Interest Rate for Senior Citizens |
| 180 days to below 1 year | 6.00% | 6.40% |
| 1 year to 2 years | 6.95% | 7.35% |
| Above 2 years to 5 years | 6.50% | 6.90% |
| Above 5 years to 10 years | 5.80% | 6.20% |
Note: The above-mentioned interest rates are subject to change from time to time.
Features of Karnataka Bank Recurring Deposit Interest Rates 2024
Apart from the highly competitive Karnataka Bank RD interest rates, the bank’s recurring deposit offers some excellent features that can help an investor stay consistent and get the best of interest gains.
Here are some of the salient features you need to know about.
- An investor can remit the instalments through cash or cheque.
- One may instruct the bank to debit their operative account to adjust monthly instalments.
- An investor has to make payments on the date on which he/she has opened the account.
- After the completion of an RD tenure, the maturity will fall on the date of opening of the account.
- One can remit instalments through intersol transaction, which is free of charge.
- The bank will levy penalties for delay in instalment payments and premature withdrawal.
How to Open an RD Account in Karnataka Bank Online?
Earning Karnataka Bank RD interest rates is easy with their simple RD opening process.
- Step 1: Log in to your Netbanking account.
- Step 2: Find the ‘E-Recurring Deposit’ option from the menu.
- Step 3: Provide information on instalment amount, recurring deposit tenure, and so on.
Your account will get activated and Karnataka Bank will credit the first RD amount from your current or savings account.
How to Open an RD Account in Karnataka Bank Offline?
By following these steps you can open an RD account offline if there is any difficulty with the online procedure.
- Step 1: Visit the nearest Karnataka Bank branch.
- Step 2: Obtain the RD form and fill it out with the required details carefully.
- Step 3: Attach the necessary documents to the form and submit it.
- Step 4: Remit the first instalment.
The bank will notify you and provide your RD account number along with other documents shortly.
Karnataka Bank RD Interest Rate Calculation
You can use the amount of monthly instalments, the applicable RD interest rate in Karnataka Bank, and tenure in two ways to calculate the maturity amount.
1. RD Calculation Formula
A = P x (1 + R/N)^(Nt)
Here,
- A denotes maturity amount
- P denotes monthly instalment amount
- R denotes annual interest rate
- N denotes compounding rate
- t denotes tenure
Let’s say one invests ₹10,000 per month for 2 years. According to the latest Karnataka Bank RD interest rates, the RD should be compounding quarterly with a 6.95% interest rate.
By placing these numbers into the formula, you can calculate the amount of money this individual is going to receive at the end of tenure.
A = 10000 x (1 + 6.95/4)^(4×24) = ₹2,58,063
A more convenient and accurate method of calculating the maturity value of RD investment is through an RD calculator that you can find online.
2. Karnataka Bank RD Interest Rates Calculator
Follow this step-by-step procedure to calculate your maturity amount using the Karnataka Bank RD calculator.
- Step 1: Find the Karnataka RD calculator page online.
- Step 2: Enter the deposit amount, interest rate, and term.
You can see the results on the screen immediately.
Karnataka Bank RD Account Eligibility Criteria
Go through this list of entities to find out if you are eligible to start an RD account with Karnataka Bank.
- Individuals
- Public and private corporations
- Hindu Undivided Families
- Societies and Trusts
- Proprietary and partnership firms
- Limited Liability Partnerships
- Government Organisations
Karnataka Bank RD Account – Documents Required
To avail the benefits of Karnataka Bank RD interest rates, individuals need to submit the following documents along with the application form and passport-size photos.
1. In the case of Resident Indians
- Driving Licence
- Voter ID
- Aadhaar card
- PAN card
- Passport
- Utility Bills
2. In the case of Non-resident Indians
- Indian Passport
- Overseas Resident Card
- Employment Visa
- Work Permit
- Student Visa
- Communication Address Proof
- Pan Card/Form 60
Types of Karnataka Bank RD Accounts
Here is a list of different types of recurring deposits with varying Karnataka Bank RD interest rates that you can avail in 2023.
1. Domestic Recurring Deposit Account
This type of recurring deposit account is only applicable to resident individuals. Besides high-yielding interest rates, the Domestic Recurring Deposit scheme comes with nomination facilities. It is an ideal RD scheme for salaried employees or individuals with a regular source of income.
- Minimum Deposit: ₹50/month
- Maximum Deposit: No limit specified
- Tenure: 6 months to 10 years
- Interest Rates: 5.80% to 7.35% including rates for senior citizens
- Eligibility: Indian residents
2. Non-Resident (External) Cumulative Deposit Account
NRE Cumulative Deposit Account is another type of RD scheme offered by Karnataka Bank to Indians staying abroad. It offers tax benefits, nomination and joint account opening facilities. The RD investment made in this account is fully and freely repatriable.
- Minimum Deposit: ₹50/month
- Maximum Deposit: No limit specified
- Tenure: 1 year to 10 years
- Interest Rates: 5.80% to 6.95%
- Eligibility: Persons of Indian Origin (PIOs), Overseas Citizens of India (OCIs) and Non-resident Indians (NRIs)
3. Non-Resident (Ordinary) Cumulative Deposit Account
Unlike the NRE RD account, this type of NRI RD account of Karnataka Bank is not applicable for the repatriation of funds and tax exemptions. However, the bank allows account holders to nominate beneficiaries and apply for joint ownership of the account with a resident individual under this scheme.
- Minimum Deposit: ₹50/month
- Maximum Deposit: No limit specified
- Tenure: 6 months to 10 years
- Interest Rates: 5.80% to 6.95%
- Eligibility: Persons of Indian Origin (PIOs), Overseas Citizens of India (OCIs) and Non-resident Indians (NRIs)
Karnataka Bank RD Premature Withdrawal Rules
The bank can allow withdrawal before maturity at its discretion. However, it will also levy penal interest rates, which are in effect from 01.12.2022, for premature withdrawal of RDs.
- A penalty of 0.50% on the applicable interest rate for premature closure of deposits below ₹2 crore.
- A penalty of 1.00% on the applicable interest rate for premature closure of deposits ₹2 crore and above.
- No interest will be payable by the bank upon premature closure/withdrawal of NRE RD within 1 year.
Karnataka Bank RD Penalty
Karnataka Bank will charge penalties if there is a delay in payment of monthly instalments. The following are the penal charges applicable to account holders in such a case.
- For tenures of 5 years and less, the bank will charge ₹1.50 for every ₹100 per month.
- For tenures of over 5 years, the bank will charge ₹2.00 for every ₹100 per month.
How to Close Karnataka Bank RD Account Offline?
Here are steps you can follow to close your RD account at Karnataka Bank offline.
- Step 1: Go to the nearest Karnataka Bank and obtain the RD Account Closure Form.
- Step 2: Submit the form to the officer-in-charge or the bank manager after attaching the necessary KYC documents.
- Step 3: Submit the RD receipt.
You can opt for the transfer of the fund to another account or withdraw the amount after the verification process is complete.
TDS on Karnataka Bank RD
As per the provision of the Income Tax Act 1961, the bank shall deduct tax if the interest gain exceeds a certain limit in a financial year through one’s operative account.
Loan Against Karnataka Bank Recurring Deposit
As per the prescribed guidelines of Karnataka Bank a loan against RD is available. Before taking such a loan, consider the following factors.
- The bank will consider your RD amount as the collateral for the loan.
- In case you fail to repay the loan, the bank will adjust it from the remaining RD balance.
- In comparison to a personal loan, you have to pay a lower interest rate.
Conclusion
Now you have an idea of how recurring deposits work and if Karnataka Bank RD interest rates can play a role in your financial planning. However, it is in your best interest to read all terms and conditions carefully associated with the RD schemes before investing, as each type comes with specific features and guidelines.
FAQs
For most banks, it is generally close to the tenure of the RD. For Karnataka Bank loans against RDs, you should contact your closest branch.
The highest interest rate for general citizens is 6.95% and 7.35% for senior citizens.
Yes, the Karnataka Bank RD interest rates are predetermined as per the bank’s guidelines. It varies with the tenure and is subject to change.
The nomination facility offered by the Karnataka RD accounts ensures that the nominee gets the RD amount in case something happens to the account holder.
No, you cannot change the tenure or the instalment date after having opened a Karnataka RD account.
