Indian Overseas Bank RD Interest Rates 2026

Based in Chennai, Indian Overseas Bank is one of the prominent public sector banks which was nationalised by the Indian Government in 1969. It has a widespread presence with 3,220 domestic branches, 4 foreign branches and a representative office along with 2 digital banking units. The bank offers a range of financial products and services with recurring deposits being one of them. 
Investing in recurring deposits is a profitable and safe option with Indian Overseas Bank RD interest rates. To find out how and why, keep reading this comprehensive guide on RD interest rates offered by the Indian Overseas Bank. 

Key Highlights

Indian Overseas Bank RD Interest Rates 2025 (Under ₹2 Crores)

For investors who want to invest minimal amounts each month for a specific duration of time with zero risk associated with the instrument, recurring deposit is one of the best options. Many investors also use this investment avenue to diversify their portfolios and reap the maximum benefits. 

Let’s take a look at the Indian Overseas Bank RD interest rates in 2025, applicable for general, senior and super senior citizens. 

Features of Indian Overseas Bank RD Interest Rates 2025

The Indian Overseas Bank RD interest rates are competitive and bound to give you assured results at maturity. Before investing in the recurring deposit let’s take a look at some other prominent features of Indian Overseas Bank RD. 

1. One can close a deposit prematurely without any difficulty.
2. Interest is compounded every quarter. 
3. 6 months to 120 months is the range of variable deposit periods. 
4. One can take loans up to 90% on the principal amount and the interest earned. 

How to Open an RD Account in Indian Overseas Bank Online?

The process of opening an RD account online is simple so that you can start earning with Indian Overseas Bank RD interest rates quicker. Here’s how to do so. 

• Step 1: Log into your Netbanking account. 
• Step 2: Navigate to ‘E-Recurring Deposit’ from the menu. An RD account opening application form will be displayed on the screen. 
• Step 3: Fill out the form with information including your monthly instalment amounts and tenure. 
• Step 4: Tick the box if you are above 60 years of age. 

The bank will further process your application form and verify the required details. After the verification process is complete, the bank will automatically deduct the pre-fixed amount from your savings/current account. 

How to Open an RD Account in Indian Overseas Bank Offline?

Follow this step-by-step guide to open an RD account in Indian Overseas Bank offline. 

• Step 1: Visit the nearest Indian Overseas Bank and ask for the application form for opening an RD account. 
• Step 2: Fill the form with essential details including instalment amounts and duration of RD. 
• Step 3: Attach the necessary documents with the form and submit it to the bank manager. 
• Step 4: Pay the first instalment. 

After the verification is complete the bank will notify you about the successful opening of the account. 

How to Calculate RD Interest Rates in Indian Overseas Bank?

There are two ways of calculating the value you are going to get from an RD investment at maturity. These are based on the applicable Indian Overseas Bank RD interest rates, your RD tenure, and monthly instalments. 

1. RD Calculation Formula 

A = P * (1 + R/N) ^ (Nt)

In this formula:

• A stands for the maturity amount you receive from an RD scheme
• P stands for the principal amount you invest in an RD scheme 
• R stands for applicable rate of interest 
• N stands for the compounding frequency 
• t stands for the tenure of an RD scheme 

Let’s say you want to calculate the maturity amount for a monthly investment of ₹1,000 for 5 years. According to the IOB RD interest rate, you would get 6.50% interest p.a. 

Here, 

• P = ₹5,000 
• n = 20 (5 years * 4) 
• R = 6.50%
• t = 60 (5 years * 12) 

So, the maturity amount, A = 5,000 * (1 + 6.50/4) ^ (4 * 60) = ₹70,989.

The probability of getting inaccurate results is higher with this type of calculation. So, to simplify the method and have a more accurate value of an RD investment you can use an online calculator.

2. RD Calculator  

It is simple and easy to calculate with an online RD calculator. Follow these steps to do it yourself. 

• Step 1: Navigate to an RD calculator online. 
• Step 2: Enter monthly investment, tenure and rate of interest. 
• Step 3: Press ‘Calculate’. 

The result will be visible on the screen immediately, specifying the maturity amount, total interest earned and the investment amount. 

Eligibility Criteria to Start an RD Account with Indian Overseas Bank

If you are one of the following entities in the list below, you are eligible to start an RD account at Indian Overseas Bank. 

1. Resident individuals 
2. Joint account holders 
3. Institutions 
4. Companies 
5. Firms 
6. Societies 
7. Professionals 
8. Salaried individual 
9. Housewife
10. Small trader 
11. Student 
12. Rural saver 

Documents Required for Starting an RD Account in Indian Overseas Bank

You would need two types of documents to open an RD account in Indian Overseas Bank apart from the application form and passport-size photos. 

1. Identity Proof

• Voter ID card 
• Driving Licence 
• PAN card 
• Government ID card
• Senior citizen ID card 
• Ration card 

2. Address Proof 

• Passport
• Electricity bill
• Telephone bill 
• ID card/Certificate issued by the Post Office 
• Bank statement with cheque 

Types of Indian Overseas Bank RD Accounts

According to your current financial standing and future goals, you can choose between these types of Indian Overseas Bank RD accounts. 

1. IOB Recurring Deposit 

This is the regular recurring deposit that Indian Overseas Bank offers. It is for Indian residents seeking to benefit from a large sum of money and can only invest small amounts every month.  

• Minimum Deposit: ₹50/month 
• Maximum Deposit: No maximum limit 
• Tenure: 6 months to 120 months 
• Interest Rate: 4.95% to 7.10% for general citizens, 5.45% to 7.60% for senior citizens, and 5.70% to 7.85% for super senior citizens  
• Eligibility: Indian residents 

2. IOB Flexi Recurring Deposits 

This RD scheme is also for resident Indians. It comes with certain specifications involving minimum and maximum monthly instalments and there is no restriction on the number of credits per month. 

• Minimum Deposit: ₹1,000/month 
• Maximum Deposit: ₹1 lakh/month 
• Tenure: 1 year to 10 years 
• Interest Rate: 6.80% to 7.10% for general citizens, 7.30% to 7.60% for senior citizens, and 7.55% to 7.85% for super senior citizens  
• Eligibility: Indian residents 

3. IOB NRO Deposits

With this scheme, non-resident Indians can save earnings from India (like dividends, rent, interest, pension, etc.) in Indian currency and repatriate funds ($1 million/FY) after paying an applicable TDS amount. 

• Minimum Deposit: No limit specified 
• Maximum Deposit: No limit specified 
• Tenure: 6 months to 10 years  
• Interest Rate: 4.95% to 7.10%    
• Eligibility: NRIs (Non-resident Indians) and PIOs (Persons of Indian Origin) 

4. IOB NRE Deposits

This scheme is beneficial for NRIs who want to invest their foreign earnings in the currency of the country in India, and earn interest. They also get a complete tax exemption on their earnings. 

• Minimum Deposit: No limit specified 
• Maximum Deposit: No maximum limit 
• Tenure: 1 year to 10 years 
• Interest Rate: 6.80% to 7.10%   
• Eligibility: NRIs (Non-resident Indians) and PIOs (Persons of Indian Origin) 

Indian Overseas Bank RD Premature Withdrawal Rules

The premature withdrawal rules for Indian Overseas Bank are as follows. 

• The premature withdrawal process is hassle-free irrespective of the amount and the completed tenure. 
• IOB allows premature withdrawal of your RD amount in exchange for a nominal penalty.
• The applicable IOB recurring deposit interest rate may vary from the promised rates if an account holder withdraws their RD investment before maturity. 
• The deposited amount and the tenure would determine the payable interest at the premature withdrawal of an RD. 

Indian Overseas Bank RD Penalty

According to the Indian Overseas Bank terms and conditions, a depositor has to pay the following penal charges for premature closure of RD accounts. 

How to Close an Indian Overseas Bank RD Account Online?

You can deactivate your account by following the steps below. 

• Step 1: Log in to your Internet Banking account.
• Step 2: Go to "Edit Profile".
• Step 3: Select ‘Deactivate account’.
• Step 4: Select the appropriate RD account you want to close and then click "submit". 

You can contact the branch if you want to activate the account again.

How to Close an Indian Overseas Bank RD Account Offline?

To close an Indian Overseas Bank RD account offline go through the following procedure. 

• Step 1: Visit the nearest branch of Indian Overseas Bank. 
• Step 2: Fill up the RD account closure form and attach all necessary KYC documents with it. Submit it to the bank manager or officer-in-charge. 
• Step 3: Submit the deposit certificate or RD receipt. 

The bank will notify you of the closure of the account through SMS and email. 

TDS on Indian Overseas Bank RD

According to the Income Tax Act, of 1961, Indian Overseas Bank deducts TDS when the aggregate interest exceeds ₹10,000 in a financial year.  

As per existing bank guidelines, the stipulated rate of tax is 10%. If a depositor does not provide PAN details during an account opening, this tax rate would be 20% or higher. 

A depositor can also apply for tax exemptions by submitting Form 15G/15H each year if the depositor meets the eligibility conditions for tax exemption. 

Loan Against Indian Overseas Bank Recurring Deposit

A depositor can take a loan against the Indian Overseas Bank RD amount. A depositor should consider the following things before taking a loan. 

1. One can take up to 90% of the principal and the earned interest. 
2. If one defaults payment on the loan the bank will adjust the amount from the RD account.
3. Interest levied on such loans is lower than a personal loan. 

Final Word

Indian Overseas Bank RD interest rates are attractive and investing in this instrument is safe too. However, as these rates are subject to change and the schemes involve a lot of intricacies, it is wise to read all scheme-related documents and consult a bank representative before putting your hard-earned money into it.