Senior citizens planning to open recurring deposit accounts will be eligible for higher interest rates in Kotak Mahindra Bank. The highest interest rate offered on senior citizen RD accounts is 7 per cent. The interest rate is applicable if a senior citizen opts for RD tenure of either 15 months, 18 months, or 21 months.
The bank is offering a maximum RD tenure of 10 years and a minimum of 6 months.
Kotak Mahindra Bank RD interest rate from Dec 9, 2022
|Tenure||Interest rate per annum (%)||Senior citizens interest rate per annum (%)|
|3 years- less than 4 years||6.30||6.80|
|4 years – less than 5 years||6.25||6.75|
|5 years- 10 years||6.20||6.70|
Source: Kotak Mahindra Bank Website
Types of penalty on RD account
There are two types of penalties applicable to recurring deposits. Banks levy a penalty if an investor delays payment of scheduled RD instalment. A penalty will also be applicable for premature withdrawal of the recurring deposit.
According to the bank’s website, a delay in payment of RD instalment, will attract a penal interest. The penal interest will be the interest rate applicable on the RD account plus 2 per cent per annum. However, this penal interest will be levied if the RD account holder fails to make the RD payment within the grace period of 5 days.
The bank will also levy a standing instruction failure charge from the bank account on which standing instructions are given. The penal interest will be recovered from the total amount of interest payable on the RD account at the time of maturity or in case of premature withdrawal.
The rule of premature withdrawal of RD depends on when it is withdrawn. If the RD account is prematurely closed within a month of deposit, then no interest will be payable. If the RD account is prematurely closed after one month but before the maturity date, then the lower interest of the following will be payable:
1. Interest rate prevailing on the date of deposit for the tenure the deposit remained with the bank, or
2. Contracted rate.
A penal charge of 0.5 per cent will be levied on the interest rate before choosing the lower interest rate.