Overview of Bank of India
This state owned bank was founded in 1906 by a group of renowned businessmen with common objectives. Headquartered in Mumbai, Bank of India (BoI) has over 4,800 branches in India with solid presence overseas represented by 56 branches, 5 subsidiaries and 1 joint venture. It is the founding member of SWIFT in India and has been a member of many such banking milestones.
Listed on the Bombay Stock Exchange(BSE), BoI provides an array of banking and financial services that spans across Retail Banking, Commercial Banking, Private Banking and Asset Management. In the retail banking portfolio, it provides a full range of term deposit options.
Recurring Deposit (RD) from Bank of India
Similar to its Public Sector counterparts, BoI provides two types of Recurring Deposit schemes which come with standard features and benefits. These schemes are structured to answer the investment needs of conventional depositors as well as the ones looking for flexibility. Below are the RD schemes available with this bank.
- Recurring Term Deposit - This standard scheme lets you invest an amount of your choice on a monthly basis and earn interest compounded on a quarterly basis. The amount of interest earned on RD is not subjected to TDS (Tax Deducted at Source).
- Star Flexi Recurring Deposit Scheme - A new age unique scheme which offers flexibility in terms of choosing a core amount on basis of which deposits can be made.
Features and Benefits of Bank of India Recurring Deposit
Recurring Term Deposit
- This scheme is open to individuals in the form of single accounts, joint accounts, minors, blind and illiterate persons.
- KYC(Know your customer) guidelines are applicable for opening an RD account which includes clear documentation in the form of ID and address proofs.
- The minimum deposit amount in rural branches is Rs.100 and Rs.500 at urban branches.
- Interest charges(as per the latest rates on term deposits) are applied on a quarterly basis, payable at the end of the term.
Star Flexi Recurring Deposit Scheme
- This scheme is open for investment to individuals which includes joint account holders and minors.
- Under this option, the depositor gets to choose a core amount on basis of which further monthly deposits can be made flexible. Monthly payments after the initial core deposit will be in multiples of this amount.
- The core amount in metro and urban areas is Rs.500 and Rs.100 in rural and semi-urban branches.
- The minimum term of deposit is 12 months and can be stretched up to 10 years, in multiples of 3 months.
- No TDS is applicable on the interest earned, as per the current income tax rules.
Interest Rates Offered on Bank of India’s Recurring Deposit
The interest earned on Recurring Deposits are purely dependent on the deposit amount and term of investment. The current interest rate on term deposit starts at 7.75% which goes up to 8.50%, depending on the term of deposit. This rate is applicable for all RD schemes where the total deposit amount does not exceed Rs.1 Crore, as well as on investments beyond Rs. 1 crore, but lesser than 10 Crores.
Senior citizens and employees on the rolls of Bank of India (includes current employees) are entitled to enjoy an enhanced rate based on eligibility. Inquire with the bank representatives for details regarding the same. The latest rate card is also available on the web portal of the bank.
Process for Opening a Recurring Deposit account with Bank of India
Bank of India follows strict KYC(Know your Customer) guidelines mandated by RBI for opening new RD accounts. Existing customers may find some relaxation on the paperwork. An account can be opened at the nearest banking branch of BoI. The documents below will be required at the time of signing up.
- Duly filled form in the required format
- Passport size photograph
- ID and Address proof
- PAN details
In addition to the above, they may require additional documents based on the applicant’s background and profession. The bank officials will update you in this regard at the time of application.
Penalty on Late Payment and Premature Withdrawal
All monthly deposits are expected to credit the RD account before the last working days of the calendar month. If there is a delay in receiving the amount within the due date, penalty is payable as per the slabs below.
- Rs.1.50 for every Rs.100 for all deposits less than or equal to 5 years.
- Rs.2.00 for every Rs.100 for deposits exceeding 5 years in term.
If the depositor is able to make advance payments, penalty payable for delayed payments by them are waivable (if equal number of early deposits are received). This is subject to the bank's discretion.
If the account is closed within the first three months of opening, no interest will be paid by the bank on the principal amount. For premature withdrawals before the end of term, penalty is applicable in the form of reduced interest rate for the last quarter.
News About Bank of India Recurring Deposit
Union Protests Against Diverting PF Funds
A notification issued on March 8th stated that PF deposits that remain unclaimed for 7 years would be diverted to a Senior Citizens Welfare Fund which is a new scheme launched to take better care of our senior citizens. The funds that could be diverted include Employees’ Provident Fund, Public Provident Fund, National Savings Certificates, Post Office Savings Accounts and Post Office Recurring Deposits. As per the EPF Act of 1952, the funds cannot be diverted for any other purpose. Out of a total of 15 crore accounts, 9.23 crore have been deemed inoperative. These accounts have a total deposit of Rs.43,000 crore. These accounts have not seen fresh deposits in at least 3 years. Central Trade Union Leaders protested against this move. However, the Centre may have to rethink this move and forfeit the PF savings. The matter will be taken up with Arun Jaitley, Finance Minister.
1st August 2016