Overview of Karur Vysya Bank Fixed Deposit

About Karur Vysya Bank

Karur Vysya Bank was established in 1916 by M. A. Venkatarama Chettiar and Athi Krishna Chettiar with the intention of helping the people of the textile town of Karur in Tamil Nadu. The bank was started with seed capital of ₹ 100,000, which, back in 1916, was a huge amount. Today the bank has grown to over 500 branches all over India and maintains over 1500 ATM’s.

Karur Vysya Bank is governed by a board of directors who are chosen from a variety of fields to help the bank continue to grow and flourish in the coming years. With such an impressive set-up it is no wonder that the bank has an equally impressive list of services that they provide to their customers. These services include personal banking (including fixed deposits), online banking, utility bill payment facilities and much more.

Karur Vysya Bank Fixed Deposits

KVB FDs are available to a number of investors as outlined below. The salient features of these fixed deposit schemes are differing tenures, attractive interest rates and interest compounding. As a savings instrument, these FDs promise account holders higher interest than a regular savings account would making them an ideal place to park funds for both the short-term as well as for the long-term as investment avenues.

Eligibility - Who can open an FD account with Karur Vysya Bank?

Like most financial institutions, any person who is a resident of India or a HUF can apply to open a fixed deposit with KVB. Trusts, partnership firms, companies, clubs, societies, etc. can also open fixed deposits with KVB.

What Fixed Deposit Schemes does Karur Vysya Bank offer?

Karur Vysya Bank offers its customers a wide variety of fixed deposit schemes to choose from which have been designed to provide investors with FD’s that suit their individual needs. Some of these schemes are:

• Thirumagal Thirumana Thittam

The Thirumagal Thirumana Thittam scheme, also known as TTT, is a scheme that is aimed at letting you invest today so as to have finances ready to take care of future needs like education or weddings. In this scheme you can invest a minimum of ₹ 100. There is no limit on how much you can invest under this scheme. This deposit needs to be opened for a minimum of 6 months and a maximum tenure of 10 years. Under this scheme the tenure must always be in multiples of 3 months.

• Fixed Deposits

As the name suggests, this is a regular fixed deposit which can be started with as little as ₹ 100. The tenure for such deposits ranges from 15 days to 10 years. The interest earned on such a deposit is payable on a monthly/quarterly/half-yearly/ annual basis however payments made on a monthly basis will be done at discounted rates.

• Senior Citizen Deposits

This is a scheme that has been designed to help senior citizens invest their money. Under this scheme depositors are entitled to special interest rates if the deposit is made for 1 year to 5 years. However, special interest rates are only applicable on deposits of up to ₹ 5 Cr. One condition that this deposit has is that proof of age must be submitted at the time of opening this fixed deposit account.

• KVB Manimala

If depositors are unable to make lump-sum deposits then this is the ideal scheme for them because this one allows for monthly deposits to be made. The minimum deposit must be of ₹ 100 and any further investment must be done in multiples of ₹ 25. The minimum tenure of such a deposit is 6 months and the maximum is 10 years. If the depositor fails to pay a monthly deposit then they may have to pay a penalty.

• KVB Tax-Shield

For those who are looking for tax benefits on their fixed deposits, this is the ideal scheme. The tenure of this scheme is 5 years. The investment amount needs to be a minimum of ₹ 100 and a maximum of ₹ 1, 50,000 in a year. Payments made towards this scheme can be shown under section 80C for tax benefits. This deposit does not allow for early withdrawal or loans against the FD.

• Rainbow Deposits

This fixed deposit comes attached to savings bank account and has all the attributes of both fixed deposits and savings accounts. It also comes with free accidental/death insurance cover of ₹ 100,000. The tenure of this deposit is 91 days and senior citizens won’t be able to avail special interests under this scheme.

• KVB Flexi Term Deposit

This is a term deposit scheme that is offered to those who will to invest higher amounts of money in fixed deposits. The minimum amount for this scheme is ₹ 1 Cr. It is a short term deposit and can be held only for 300 days at a time. The interest rate offered on this deposit is about 8% per annum. In case the depositor wants to close the account prematurely, he can do so without incurring penalties after the minimum 15 day period is over.

What is the minimum amount required to open an FD account with KVB?

The minimum amount required to open an FD with Karur Vysya Bank depends on the type of fixed deposit that you want to open. For most schemes the minimum amount required is ₹ 100 but in the case of the KVB Flexi Term Deposit, the minimum amount required is ₹ 1 Cr.

What is the maximum amount that can be deposited in a KVB FD account?

There is no limit on how much amount can be put in a fixed deposit with KVB, however deposits made in excess of ₹ 1 Cr may require clearance from the bank. The only place where there is an actual limit on the amount that can be invested is for senior citizens. In their case the limit is ₹ 5 Cr. and is linked to the Senior Citizens Deposit scheme.

What is the minimum / maximum period for which funds can be held in as fixed deposits with Karur Vysya Bank?

The minimum and maximum time periods for which funds can be held in an FD may differ from one scheme to another. The absolute minimum is 15 days and the maximum is 10 years or 120 months. In the case of the Tax Shield scheme the tenure is fixed at 5 years with no premature closure permitted.

What is the procedure to open a fixed deposit account at Karur Vysya Bank?

If you want to open a fixed deposit with Karur Vysya Bank then all you have to do is to visit the BankBazaar website. There you will be provided with a calculator that will help you decide on the amount and tenure of the fixed deposit and also show you the amount you’ll get at the time of maturity. Once you have decided on all of this, you can download the FD form from the site, fill it up and submit it at any branch of KVB. You will also be required to submit relevant supporting documents like address proof and identity proof.

What are the interest rates offered on Karur Vysya Bank fixed deposits?

The interest rates offered on Karur Vysya Bank fixed deposits may vary from scheme to scheme. It will also depend on the duration of the term deposit and the amount that is being deposited. In general, the lowest interest rate offered by them is 6% and the highest is 8.9%. In the case the TVB Flexi Term Deposit, which requires a minimum of ₹ 1 Cr, the interest rate offered is 8%. Senior citizens are entitled to claim a special interest rate of up to 9.4%.

Does KVB offer tax saver fixed deposits?

Yes, KVB does offer tax saver fixed deposit schemes. It is known as the KVB Tax-Shield and allows investors to invest a minimum of ₹ 100 and a maximum of ₹ 1.5 lakhs. The tenure is fixed at 5 years and in case of joint account, tax benefits are extended only to the primary holder.

Are FD accounts with KVB taxable?

Yes. The interest earned on fixed deposits with Karur Vysya Bank are taxable under relevant laws however, if a person does not fall under a tax bracket and has furnished forms 15G and 15H then they may be exempted from tax deductions. The tax on interest earned is generally deducted at source by the bank.

What are the main features of Karur Vysya Bank fixed deposit schemes?

The feature that you can expect to see associated with KVB fixed deposits are:

• Nomination facilities
• Loans against fixed deposits
• Special interest rates for senior citizens
• Tax benefits under section 80C
• Free accidental/death insurance of ₹ 100,000

It must be noted that the feature of each FD scheme may vary as per the scheme selected.

Are loans provided against FDs at Karur Vysya Bank?

Yes. KVB does provide loans against FD’s maintained with them. The amount of the loan will be a predefined percentage of the deposited amount and may vary from scheme to scheme. There may also be some schemes under which loans against FD’s may not be permitted.

Does KVB offer senior citizens special rates on their fixed deposits?

Yes, KVB does offer senior citizens special interest rate. These rates range from 9.15% to 9.4% and are subject to the time period for which the deposit is being held.

Does KVB issue credit cards against fixed deposits held at Karur Vysya Bank?

No, Karur Vysya Bank does not offer credit cards against fixed deposits held with them.

What happens if the fixed deposit is closed prematurely?

In case your FD is opened under the KVB Tax-Shield scheme there is no option to close it prematurely since it comes with a lock-in period of 5 years. For all other fixed deposits, premature withdrawals are permitted. If the FD is closed within 8 days, no interest will be paid to the depositor.

For NRE deposits, there is no penalty applied for premature withdrawals provided the deposit amount is more than Rs. 15 lakhs and the deposit has stayed with the bank for at least 1 year.

Does Karur Vysya Bank offer term deposits for NRIs?

Yes, the bank does offer NRE and FCNR term deposits. The interest you earn on an NRE deposit ranges from 8.5% per annum for deposits held for 1 or 2 years to 8.75% per annum for deposits held for durations longer than 2 years.

In the case of FCNR deposits, the deposit can be created in USD, Euro, JPY, GBP, CAD and AUD. The interest rates offered will depend on the currency in which you open the deposit and the duration will range from 1 year to 5 years.