The City Union bank was set up in the year 1904 as the Kumbakonam Bank. Originally established as a regional bank, it provided financial products and services to residents of the Kumbakonam region, later expanding to the Thanjavur delta.
The bank had its first branch in Mannargudi in 1930, and this marked the onset of the bank’s expansion, with branches in neighbouring areas being set up in quick succession.
In 1965, the bank was merged with the City Forward Bank and the Union Bank. As a consequence of this merger, the bank was re-named the Kumbakonam City Union Bank.
As the bank continued its expansion, opening branches outside of Tamil Nadu, the leadership took the decision to rename it The City Union Bank, in keeping with its national presence.
The bank now has almost 500 branches and over 1290 ATM’s spread throughout the country and offers a wide variety of financial products and services to its customers.
Recurring Deposit (RD) from City Union Bank
The City Union Bank offers three types of Recurring Deposit schemes to customers. Under a Recurring Deposit scheme, a set amount of money is deposited every month and interest is accrued on this sum, which is payable on maturity.
The interest rates applicable to recurring deposits are on par with market standards and can go as high as a fixed deposit account.
The advantage of an RD over a fixed deposit is the depositor is not burdened with making a large one-time investment, but can instead choose to deposit a small sum every month.
Recurring Deposit Schemes from City Union Bank
The types of RD offered by City Union Bank are mentioned below:
- Monthly Deposit Scheme
- VIP Deposit Scheme
The Monthly Deposit Scheme offered by the bank is a traditional Recurring Deposit, where a fixed sum of money is deposited each month into the account. Accounts can be held singly or jointly for a tenure ranging from 12 months to 120 months. Interest on the deposit amount will be compounded and will be payable on maturity of the deposit.
If the deposit is closed prematurely for any reason, the interest payable will be calculated as per directives issued by RBI to this effect.
In case of a default in the monthly payments, a penalty of Rs.0. 60 will be charged per Rs. 5 deposited in the case of deposit tenures of less than 5 years. For tenures above 5 years and up to 10 years, the depositor will have to pay Rs. 0.10 per Rs.6 deposited.
The VIP Deposit scheme is a RD scheme which can be opened either individually or jointly by individuals above the age of 12 years. The RD can be held for a tenure of 12 months to a maximum of 120 months. On opening the deposit, the depositor can choose the minimum sum to be deposited every month, which is known as the seed amount. The depositor is to make monthly deposits of any amount in multiples of Rs. 10 above the seed amount, with the minimum amount being Rs. 100.
Failure to make the monthly payment for 3 months in a row will result in the account being deemed withdraw before maturity and a penalty of 1% per annum will be levied on the rate applicable.
Features of City Union Bank Recurring Deposit
The Recurring Deposit schemes offered by City Union Bank has the following features:
Monthly Deposit Scheme:
- Depositors can choose the tenure of their deposits, with the minimum being 12 months and the maximum being 120 months.
- No cap on the monthly deposit amount.
- Depositors can avail loans which can be re-paid quarterly.
- Nominations can be made for the RD.
- There is no Tax Deductible at Source (TDS) for the scheme.
- RD can be opened by minors above the age of 12 years.
- RD can be opened by NRI’s/NRE’s subject to regulations by FERA.
- Depositors can choose the RD tenure, from 12 months to a maximum of 120 months.
- Depositors can decide the minimum amount payable every month.
- No charges for default on payments up to 3 consecutive months.
Interest Rates for City Union Bank Recurring Deposit
The interest rates payable for City Union Bank RD are calculated based on the maturity as well as the type of deposit it is (whether NRE or resident). The interest rates range from 7.75% for deposit tenures of 1 year to 5 years and 7.50% per annum for deposits with a tenure of 5 years to 10 years. Senior citizens will receive 8% per annum for deposit tenures of 1 year to 5 years and 7.75% for deposit tenures from 5 years to 10 years.
NRE depositors would receive 7.75% per annum for their deposits with a tenure of 1 to 3 years and 7.50% per annum for deposits with a tenure over 3 years up to 10 years.
How to Open a City Union Bank Recurring Deposit
The process for opening a Recurring Deposit with City Union Bank is a simple and convenient one. Individuals will have to submit their KYC (Know Your Customer) documents to the bank along with the Recurring Deposit Opening Form.
The form can be filled in either offline through any of the bank’s branches or online on the bank’s official website.
Once the form and documents have been filled in and submitted, the bank would notify the individual regarding details of the RD and the individual can begin making deposits from the same or following month.
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