Bank of India FD rates-2024
Introduction:
Bank of India (BOI) is among the oldest nationalized banks in India, with its headquarters located in Mumbai. It provides a comprehensive range of banking and financial services to both retail and corporate clients.
As a founding member of SWIFT (Society for Worldwide Interbank Financial Telecommunication), Bank of India utilizes this network for efficient financial processing and communication services.
The bank offers a variety of fixed deposit schemes, allowing customers to safeguard their savings while earning interest.
The interest rates on Bank of India's fixed deposits are generally higher than those on savings accounts. At the time of opening an FD, customers must deposit a specified amount, and no additional deposits or withdrawals are permitted during the tenure of the deposit.
Key Features and Advantages of Axis Bank Fixed Deposits
Tenure Options: BOI fixed deposits are available with terms ranging from 7 days up to 10 years.
Nomination Facility: Bank of India provides a nomination facility for FD accounts.
Loan/Overdraft Availability: Customers can access loan or overdraft facilities up to 90% of the fixed deposit amount.
Higher Rates for Seniors: Senior citizens receive an additional 0.50% interest above the standard rates.
Variety of FD Plans: A wide selection of fixed deposit schemes is offered by Bank of India.
Minimum Investment: The minimum amount required to open a fixed deposit with BOI is Rs. 10,000.
Bank of India FD Interest Rates 2024
Tenure
Interest
Rates (PA)
Interest Rate
for Seniors (PA)
1 month 16 days - 5 months 26 days
4.5%
5%
5 months 27 days - 8 months 25 days
5.5%
5%
8 months 26 days - 11 months 30 days
5.75%
6.25%
1 year - 1 year 11 months 30 days
6.8%
7.3%
7.25%
7.75%
2 years 1 day - 2 years 11 months 30 days
6.75%
7.25%
5 years - 9 years 11 months 29 days
6.5%
7%
5 years - 9 years 11 months 29 days
6%
6.5%
Types of Axis Bank FD Schemes
Bank of India Fixed Deposit Schemes Overview
Regular Fixed Deposit:
Minimum Deposit: Rs 10,000 in metro/urban, Rs 5,000 in rural/semi-urban, and for senior citizens.
Interest Payout: Semi-annually on October 1st and April 1st.
Premature Closure: No penalty after 12 months for deposits under Rs 5 lakh; otherwise, up to 1% penalty.
Star Sunidhi Tax-Saving Deposit Scheme:
Tenure: 5-10 years.
Deposit Limits: Minimum Rs 10,000, maximum Rs 1.5 lakh per financial year.
Premature Withdrawal: Not allowed before 5 years except in case of depositor’s death.
Short Term Deposit:
Minimum Deposit: Rs 1 lakh for 7-14 days in metro/urban areas.
Tenure: Up to 6 months.
Premature Closure: Penalties applicable as per regular FD terms.
Double Benefit Term Deposit:
Interest Rate: Quarterly compounding.
Interest Payout: At maturity.
Premature Closure: Penalties applicable as per regular FD terms.
Quarterly/Monthly Term Deposit:
Interest Payout: Monthly/quarterly, with monthly payouts at a discounted rate.
Premature Closure: Penalties applicable as per regular FD terms.
Motor Accident Claims Term Deposit:
Tenure: 3-10+ years based on court directives.
Minimum Deposit Amount: Based on monthly annuity needs.
Premature Closure: Allowed with court’s permission, no penalties in case of the claimant’s death.
NRE Term Deposit:
Tenure: 1-10 years.
Taxation: Exempt from income tax; full repatriability.
Premature Closure: No interest for deposits held less than 12 months; other withdrawals after 12 months without penalty under Rs 5 lakh.
NRO Term Deposit:
Tenure: 7 days to 10 years.
Taxation: Subject to withholding tax; repatriable up to USD 1 Million.
Premature Closure: Penalties applicable as per regular FD terms.
FCNR Deposit:
Tenure: 1-5 years.
Currency: USD, AUD, GBP, EUR, CAD, JPY.
Taxation: Exempt from income tax; full repatriability.
RFC Deposit:
Tenure: 1-3 years.
Currency: USD, GBP.
Taxation: Exempt from income tax until the depositor is resident but not ordinarily resident.
Premature Withdrawal: Free repatriability.
Capital Gain Tax Saving Scheme:
Accounts: Account ‘A’ (Savings) and Account ‘B’ (Term Deposit).
Interest Exemption: Subject to TDS; not used as security.
Premature Withdrawal: Conversion to a savings account allowed.
These schemes cater to a wide range of financial needs from short-term liquidity to long-term savings and tax benefits, accommodating both residents and NRIs with various depositor benefits.
How to Open a Fixed Deposit Account with Axis Bank
You can open a Bank of India FD account through various channels including mobile app, internet banking, and offline at a branch.
1) Internet Banking:
Step 1: Log in to your Bank of India NetBanking account.
Step 2: Navigate to the ‘Fixed Deposit’ tab, select ‘Open FD’, and choose the type of deposit account.
Step 3: Enter all required details including nominee information and maturity instructions.
Step 4: Confirm the details and complete the transaction. A confirmation message will be displayed once successful.
2) Mobile App - Bank of India App:
Step 1: Download and log in to the Bank of India App.
Step 2: Select ‘Open FD’ and choose the deposit account type.
Step 3: Provide all necessary details, nominee information, and payment instructions.
Step 4: Confirm the details and complete the transaction. You will see a confirmation message upon successful account opening.
3) Offline at a Branch:
Step 1: Visit your nearest Bank of India branch.
Step 2: Complete the FD application form and submit it along with the necessary documents and the deposit amount.
Step 3: Upon successful processing of your application, you will receive an FD receipt from the bank.
These methods provide flexible options for customers to securely invest their savings in fixed deposits with Bank of India.
Qualifications for Opening a Fixed Deposit Account at Axis Bank
Bank of India offers fixed deposit accounts to a wide range of customers including:
Residents
Individual and joint account holders
Minors
Senior citizens
Societies, trusts, and similar organizations
Sole proprietorships
Companies
Clubs
Additionally, Non-Resident Indians (NRIs) are eligible to invest in these schemes through their NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts.
Necessary Documents to Open a Fixed Deposit Account at Axis Bank
To start a fixed deposit investment with Bank of India, customers must provide identification and address proof. Below are the acceptable documents:
Proof of Identity (choose one):
Aadhaar card
PAN card
Passport
Ration card with photograph
Voter ID
Senior Citizen ID (if applicable)
Driving license
Proof of Address (choose one):
Electricity bill
Telephone bill
Aadhaar card
Passport
Driving license
Certificate issued by the Post Office
These documents are required to verify the identity and residence of the account holder during the FD account opening process.
Early Withdrawal of Axis Bank Fixed Deposit
Bank of India allows premature withdrawal on all fixed deposits. For deposits under Rs. 5 lakhs, BOI imposes a 0.5% penalty if withdrawn before completing 12 months.
However, no penalty is charged if these deposits are withdrawn after 12 months. For deposits exceeding Rs. 5 lakhs, a penalty of 0.5% is applied to premature withdrawals regardless of whether they occur before or after 12 months.
Role of Fixed Deposits in an Investment Portfolio
Investing in market-linked instruments carries risks, particularly when aiming for higher returns.
To achieve a balanced financial portfolio, it's crucial for investors to include safer investment options as well.
Fixed deposits offer a secure investment avenue with guaranteed returns, contrasting with higher-risk options.
Thus, even if investors incur losses from other ventures, they can offset some of those losses through the stable earnings from fixed deposits.
This strategy can help maintain financial stability in their overall investment portfolio.
Benefits of Investing in a Fixed Deposit Account
IFixed deposit accounts offer several advantages that make them appealing to investors:
Stable Returns: These accounts provide a constant interest rate, ensuring predictable and steady returns.
Low Risk: As FDs are not impacted by market volatility, they are considered low-risk, making them suitable for conservative investors.
Capital Preservation: The principal amount is secure, and investors are assured of receiving their initial investment plus the accrued interest at the end of the maturity period.
Flexible Tenure Options: Investors can select from various tenure lengths offered by banks, ranging from a few months to several years, to align with their financial objectives.
Ease of Investment: Setting up a fixed deposit account is easy, requiring only minimal paperwork and a straightforward application process.
Regular Income Stream: Particularly beneficial for retirees, FDs can provide a consistent income stream through periodic interest payouts (monthly, quarterly, or annually).
Loan Facilities: Fixed deposits can also serve as collateral for loans, offering financial flexibility while keeping the deposit intact.
Tax Benefits: Certain types of fixed deposits qualify for tax deductions under specific sections of the Income Tax Act, promoting long-term savings.
No Market Dependency: The performance of FDs is independent of market conditions, offering stability regardless of economic fluctuations.
Ideal for Short to Medium-Term Goals: FDs are well-suited for meeting short to medium-term financial objectives, such as purchasing a vehicle, funding education, or planning a holiday.
Drawbacks of Fixed Deposit Accounts
Fixed deposit accounts come with certain limitations, which are outlined below:
Taxation on Interest: The interest income from fixed deposits is taxable under "Income From Other Sources" when you file your Income Tax Returns (ITR). For those seeking tax-free earnings, options like Tax-Saver FDs, ULIPs, PPF, and government bonds may be more suitable.
TDS Applicability: TDS (Tax Deducted at Source) is deducted from the interest earned on fixed deposits, which can reduce the overall returns from your investment.
Comparatively Lower Interest Rates: Generally, fixed deposits offer lower interest rates, typically between 5% to 9% per annum, which may be less than other investment avenues, potentially limiting your investment growth.
Interest Rates and Inflation: Sometimes, the interest rates on fixed deposits may not keep up with inflation, leading to a decrease in the real value of your returns over time.
Fixed Interest Rates: Unlike other investments where rates might fluctuate, fixed deposits maintain a constant rate throughout their tenure. This means returns do not increase even if market or economic conditions improve.
Limited Access to Funds: Your funds are locked in for the duration of the deposit, restricting access to your money. Early withdrawal is possible but usually incurs penalties, affecting your total returns.
Understanding Loan Against Fixed Deposit
Investors with fixed deposits can secure a loan against their FD holdings. The maximum loan amount available can differ from one bank to another and is typically a specified percentage of the fixed deposit value.
The interest rates for loans against fixed deposits are generally lower than those for unsecured loans. Investors looking to take advantage of this should carefully compare interest rates.
The repayment period for such a loan is usually capped at the maturity term of the associated fixed deposit.
Tax Implications on Fixed Deposit Earnings
Interest earned from fixed deposits is subject to Tax Deducted at Source (TDS) according to the rules set forth in the Income Tax Act. This interest income is then reported on Income Tax Returns under "Income from Other Sources."
The Income Tax Department applies the TDS against the individual's total tax liability. However, TDS on interest income is only deducted when the total interest earnings across all sources exceed Rs. 40,000 annually.
If earnings are below this threshold, individuals should submit Form 15G/H to the financial institution to avoid TDS. Form 15G/H can also be submitted for interest earnings above Rs. 40,000, but in such cases, individuals must ensure they meet any remaining tax obligations themselves.
Additionally, if an individual invests in a tax-saving FD, they are eligible to claim a tax exemption on the principal amount up to Rs. 1.5 lakh per financial year.
What is a fixed deposit?
A fixed deposit is a type of savings account where money is deposited for a fixed period and earns interest at a predetermined rate.
How safe are fixed deposits?
Fixed deposits are considered very safe as they are not affected by market fluctuations and often guaranteed by the bank or financial institution.
Can I withdraw money from my fixed deposit before maturity?
Yes, but early withdrawal may incur penalties and result in lower interest earnings.
Do fixed deposits offer tax benefits?
Tax-saver fixed deposits qualify for tax deductions under Section 80C of the Income Tax Act but come with a lock-in period.
What documents are required to open a fixed deposit account?
Typically, you need identity proof, address proof, and sometimes a PAN card, along with the completed application form.
Author
Harish Malhi
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