Central Bank of India Fixed Deposit rate-2024
Introduction:
Central Bank of India is a government-owned nationalized bank under the Ministry of Finance and stands as one of India's oldest and largest nationalized banks. Despite its name, it is not to be confused with the Reserve Bank of India. The bank boasts an extensive network consisting of 4,608 branches, 3,644 ATMs, ten satellite offices, and one extension counter.
Central Bank of India offers a variety of fixed deposit schemes featuring attractive interest rates, allowing customers to maximize returns on their surplus savings. Customers must deposit a fixed amount initially when opening the account. The interest rates for Central Bank of India's fixed deposits vary depending on the chosen tenure.
Key Features and Advantages of Central Bank of India Fixed Deposits
Tenure Options: Ranges from 7 days to 10 years.
Loan Facility: Available up to 90% of the FD value.
Nomination Facility: Provided for all fixed deposit accounts.
Minimum Deposit Requirement: Rs. 5,000 is required to open an FD with Central Bank.
Liquidity: Quick and easy liquidity options are available.
Competitive Interest Rates: All Central Bank FD schemes offer competitive rates.
Benefits for Senior Citizens: Senior citizens receive an additional 50% over the regular FD interest rates.
Central Bank of India FD Interest Rates 2024
Tenure
Interest
Rates (PA)
Interest Rate
for Seniors (PA)
15 days - 1 month 15 days
3.75%
4.25%
1 month 16 days - 1 month 29 days
4.5%
4.25%
1 month 30 days - 2 months 29 days
4.75%
5.25%
3 months - 5 months 26 days
5%
5.5%
6%
6.5%
8 months 27 days - 11 months 30 days
6.25%
6.75%
2 years - 2 years 11 months 30 days
6.75%
7.25%
2 years - 2 years 11 months 30 days
7%
7.5%
3 years - 4 years 11 months 29 days
6.5%
7%
Types of Central Bank of India FD Schemes
Central Bank of India Fixed Deposit Schemes for Resident Indians
Cent Garima Term Deposit Scheme
This scheme offers a specific tenor for depositors to earn a higher interest rate on their term deposits.
Tenure: Fixed period of 777 days
Minimum Deposit Amount: Rs 10,000
Maximum Deposit Amount: Rs 10 crore
Interest: Senior citizens enjoy an additional 0.50% interest rate. However, this benefit is not applicable under NRE Deposits for senior citizens.
Interest Payout Options: Monthly/Quarterly intervals or Cumulative type
Eligibility: Both Resident and Non-Resident Indians can open this term deposit account.
Premature Withdrawal: Allowed with a penal interest rate of 1% charged on withdrawals before maturity, irrespective of the deposit amount. For NRE accounts, no interest will be payable if closed within one year, and a penal interest of 1% will be levied if closed before maturity after one year. Premature withdrawal is not allowed if a loan is availed against the deposit.
Auto Renewal Facility: Not provided; the maturity amount will be transferred to the linked savings or current deposit account of the depositor.
Demand Loan/Overdraft Facility: Loan/overdraft facility available up to 90% of the deposit amount, with an interest rate of 1% p.a. above the floating interest rate.
Fixed Deposit Receipt (FDR)
This short-term fixed deposit allows depositors to earn higher interest rates.
Tenure: 7 days to 120 months
Deposit Amount: Minimum Rs 100 and thereafter in multiples of Rs 100
Interest: Simple interest credited every 6 months or on maturity.
Premature Payment: Allowed with a penal interest of 1% on premature withdrawals above Rs 5 lakh.
Loan/Advance against Deposit: Loan facility available up to 90% of the deposit amount.
Money Multiplier Deposit Certificate (MMDC)
Interest accrued is added back to the principal, increasing the deposits exponentially.
Tenure: 6 to 120 months
Deposit Amount: Minimum Rs 100 and thereafter in multiples of Rs 100
Interest: Simple interest credited every 6 months or on maturity.
Premature Payment: Allowed as per prevailing rules.
Loan/Advance against Deposit: Loan facility available.
Monthly Interest Deposit Receipt (MIDR)
Offers monthly interest earnings without affecting the principal amount.
Tenure: 12 to 120 months
Deposit Amount: Minimum Rs 5,000 and thereafter in multiples of Rs 1,000
Premature Payment: Allowed as per prevailing rules.
Loan/Advance against Deposit: Loan facility available.
Quarterly Interest Deposit Receipt (QIDR)
Offers quarterly interest earnings without affecting the principal amount.
Tenure: 12 to 120 months
Deposit Amount: Minimum Rs 5,000 and thereafter in multiples of Rs 1,000
Premature Payment: Allowed as per prevailing rules.
Loan/Advance against Deposit: Loan facility available.
Cent Tax Saving Deposit
Offers tax benefits under Section 80C of the Income Tax Act.
Tenure: Fixed period of 5 years
Minimum Deposit Amount: Rs 100 or multiples thereof
Maximum Deposit Amount: Rs 1.5 lakh in a financial year
Deposit Options: Monthly Interest Deposit, Quarterly Interest Deposit, or Reinvestment Plan (Cumulative)
Premature Payment/Loan Facility: Not allowed; the deposit receipt cannot be pledged for any type of loan or as collateral security.
Cent Suraksha Deposit
Links the FD account to an existing savings bank account for automatic reverse sweep.
Linked FDs broken on a Last-In, First-Out (LIFO) basis for reverse sweep.
Auto renewal available; renewed for the same tenure as the original.
Depositors can avail loan/overdraft facilities against the FD scheme.
Cent Super Callable Time Deposit for 444 days
Tenure: Fixed period of 444 days
Deposit Amount: Rs 10,000 to Rs 10 crore
Interest Rates: Additional interest of 0.50% for senior citizens.
Premature Withdrawal: Allowed with applicable rates.
Cent Green Time Deposit Scheme
Funds used for lending to green projects like renewable energy, water management, etc.
Tenure: Fixed periods of 1111, 2222, and 3333 days
Deposit Amount: Rs 50,000 to less than Rs 2 crore
Additional interest rates offered over fixed deposit card rates, plus extra 0.50% for senior citizens.
Premature Withdrawal: Allowed with applicable rates.
Cent Floating Deposit Scheme
Offers MMDC, MIDR, QIDR with floating interest rates.
Tenure: 1 to less than 2 years and 2 to less than 3 years
Deposit Amount: Rs 1 lakh to less than Rs 2 crore
Interest Rates: Linked to current repo rates with additional mark-up rates.
How to Open a Fixed Deposit Account with Central Bank of India
You can open a fixed deposit (FD) account at the Central Bank of India either online or offline:
1) Online Method:
Step 1: Visit the Central Bank of India's official website and log in to the internet banking portal using your username and password.
Step 2: Navigate to the ‘Online Term Deposit’ tab and select the type of FD you wish to open.
Step 3: Enter all the required details, verify them, and then click on ‘Confirm’.
Step 4: A confirmation message will be displayed once the deposit is successfully booked.
2) Offline Method:
Step 1: Visit your nearest Central Bank of India branch.
Step 2: Complete the Central Bank FD application form and submit it along with all necessary documents and the deposit amount.
Step 3: Upon successful processing of your application, your FD account will be opened.
These methods provide flexibility for customers to invest in fixed deposits with Central Bank of India, whether they prefer handling their banking needs online or in person.
Qualifications for Opening a Fixed Deposit Account at Central Bank of India
To open a fixed deposit account with Central Bank of India, the following entities are eligible:
Joint account holders
Resident individuals
Minors
Trusts
Panchayats and municipalities
Sole proprietorships
Illiterate persons
Members of Joint Hindu Families
Religious, charitable, and educational institutions
Partnership firms
These groups can initiate a fixed deposit account with Central Bank of India, securing their savings and earning interest over time.
Necessary Documents to Open a Fixed Deposit Account at Central Bank of India
Required Documents for Opening a Central Bank of India Fixed Deposit
When opening a fixed deposit account at Central Bank of India, customers need to provide the following documentation:
Proof of Identity (choose one):
Aadhaar card
PAN card
Defence ID card
Passport
Voter ID
Proof of Address (choose one):
Telephone bill
Electricity bill
Aadhaar card
Bank account statement with a cheque
Letter from a reputed employer
Additional Requirements:
Senior citizens and minors must also provide documentation to verify their age, such as a Driving License, PAN card, Passport, or birth certificate.
These documents are essential for completing the application process for a fixed deposit scheme with Central Bank of India.
Early Withdrawal of Central Bank of India Fixed Deposit
Premature Withdrawal Policy for Central Bank of India Fixed Deposits
Central Bank of India allows the premature withdrawal of fixed deposits. For deposits exceeding Rs 5 lakhs, the bank imposes a penalty of 1% on the interest. However, there is no penalty for premature withdrawal of deposits under Rs 5 lakhs. It's important to note that premature withdrawals are not permitted for tax-saving fixed deposits.
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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