Kotak Mahindra RD Interest Rates

Kotak Mahindra Bank’s Recurring Deposit is one of the saving schemes by the lender that offers a good interest rate to help you reach your financial goals sooner. Among them, recurring deposits or RDs are considered to be one of the most preferred savings instruments these days. The fact that it enables individuals to build a reliable corpus with minimum regular investments certainly works in its favor. The attractive Kotak Mahindra RD rates and other such essential features make it a better savings tool than most others.

Kotak Mahindra RD Rates 2024

Tenure RD Rates for General Citizens RD Rates for Senior Citizens
6 months 4.40% 4.90%
9 months 4.40% 4.90%
12 months 4.90% 5.40%
15 months 5.10% 5.60%
18 months 5.10% 5.60%
21 months 5.10% 5.60%
24 months 5.20% 5.70%
27 months 5.20% 5.70%
30 months 5.20% 5.70%
33 months 5.20% 5.70%
3 years to 3 years 364 days 5.40% 5.90%
4 years to 4 years 364 days 5.40% 5.90%
5 years to 10 years 5.50% 6.00%

It must be noted that Kotak RD interest rates are revised periodically as and when the bank deems fit. The new RD rates are usually based on the date and time of when the account is started. Individuals must get in touch with the representative of Kotak Bank to avail accurate and case-specific details about the applicable RD rates of Kotak Mahindra.

Features of Kotak RD Interest Rates 2024

  • An RD account with Kotak Mahindra Bank can be opened in the name of minor
  • The tenure of the deposit ranges from 12 months to 120 months
  • The minimum amount can be deposited in Rs. 5,000 or Rs. 10,000 multiples
  • Premature withdrawal is allowed under certain conditions with penalties
  • A nomination facility is available
  • Visit any Kotak Bank branch to avail of this service
  • TDS deductions depend on the existing income tax rules as at the time of opening the RD account
  • Penalty on not paying the periodic deposit is Rate of RD interest rate + 2% p.a

How to Calculate Kotak RD Interest?

The interest on the Kotak Mahindra Recurring Deposit is compounded quarterly and the formula used for calculation of the maturity value is:

A= P x (1+R/N) ^ (Nt)

Here,

A = Maturity Amount.

P = Monthly Installment

N = Number of times the interest is compounded.

R = Rate of Interest

t = tenure

For example, Mr. Piyush, who lives in Orissa and is below 60 years of age, decides to open an RD account with Kotak Mahindra with a deposit of Rs 4400 for 5 years. Therefore, the applicable interest rate for him is 4.50%. In that case, the total interest amount accumulated at the end of the maturity period will be Rs. 32,419 and his total maturity amount will be Rs. 2,96,419.

To avoid the cumbersome manual calculation process, individuals can use the online calculation tool of Kotak Mahindra RD and compute the accurate maturity value and interest amount for the given tenure. It not only helps users eliminate the risk of manual errors but also helps them to save significant time and energy.

Moreover, an online RD calculator is quite simple to use; all one needs to do is enter details like the monthly deposit value and tenure. Individuals can also make several adjustments to arrive at a suitable combination of deposit amount and tenure.

How to Open an RD account with Kotak Mahindra Bank?

One can use any of the following channels to open an RD account with Kotak Mahindra Bank:

  • Call 1860 266 2666
  • Existing Kotak users can just Login to your Kotak Net Banking account and open an RD account instantly
  • Visit the nearest Kotak Mahindra Bank branch

Types of Kotak Mahindra Recurring Deposits

Recurring deposits offered by Kotak Mahindra Bank are of two types –

  • Cumulative recurring deposit account

With a cumulative RD account, individuals can choose to avail the interest amount, alongside the amount deposited, after the completion of the RD’s tenure. With this RD, since the interest amount is accrued periodically without availing of the payout, depositors can enjoy substantial returns from their deposits.

  • Non-cumulative recurring deposit

With this type of RD, individuals can avail of periodic interest payouts and are thus more suitable for those looking for a short-term deposit plan to park their corpus. With non-cumulative recurring deposits, however, the returns are significantly lower than the former one.

Kotak Mahindra RD Account Eligibility 

Typically, individuals belonging to any of the categories below can start a Kotak Mahindra RD Account –

  • Resident Indian
  • The sole or joint entity
  • Non-resident Indian

It is a convenient option to mobilize small savings each month to build a reliable fund. Generally, it is considered to be a suitable savings plan for salaried individuals who do not generate substantial income to make lump sum investments. Also, the fact RD schemes are least affected by prevailing market conditions effectively makes them low-risk savings options.

Documents Required for Kotak Recurring Deposit Account Opening

Address Proof – The following documents (any 1) are required for address proof –

  • Passport
  • Bank Statement
  • Electricity Bill
  • Telephone Bill
  • Certificate/ID card issued

Identity Proof – The following documents (any 1) are required as identity proof –

  • Passport
  • PAN card
  • Voter ID card
  • Government ID card
  • Driving License
  • The Senior Citizen ID card
  • Ration Card

Factors that Influence Kotak Mahindra RD Rates 

Before getting into details about Kotak’s recurring deposit interest rates, it is crucial for depositors to be familiar with factors influencing the RD rates.

Following are a few such factors that impact the rates

  • Deposit amount: A high deposit value accrues a higher rate of interest and helps deposit holders to grow their savings significantly.
  • Tenure: In most cases, an RD account with a tenure of over 15 months is entitled to receive a higher rate of interest.
  • Compounding Frequency: Usually, a higher compounding frequency yields higher interest and in turn, helps the deposit amount to grow.
  • Customer type: The rate of interest also depends on the customer type. For instance, an additional Kotak RD Rate of 0.50% is paid to depositors who belong to the senior citizen category.
  • RBI policies: Any major change in the policies of the Reserve Bank of India, pertaining to deposit accounts, will influence the Kotak Bank RD interest rates. For instance, rate cuts by RBI often lead to a reduction in the interest rates offered on recurring deposit schemes.

TDS on Kotak Mahindra Recurring Deposits 

As per the Income Tax Act, 1961, all RD schemes are subjected to tax because the interest earned on the deposit amount gets added to the depositor’s annual income. In turn, the interest earned becomes a part of one’s taxable income.

Notably, if the total accrued interest amount exceeds Rs.10000 in a year, a TDS at the rate of 10% is charged on it. However, the RD account holder can raise a claim for tax exemption by submitting Form 15G/15H.

It must be noted here that the RD account holder must meet a few conditions to file such forms. For instance,

In the case of form 15G

  • One has to be a resident Indian below the age of 60 years.
  • The deposit holder must be HUF or an individual.
  • His/her computed tax amount on total income is nil.
  • The total interest earned in the year should be less than the minimum tax exemption limit for the year.

In the case of form 15H

  • One must be a resident Indian who is at least 60 years of age.
  • His/her tax amount on the total income is nil.

Premature Withdrawal of Kotak Bank RD

Kotak Bank Bank allows the Premature withdrawal of RD. However, the Bank may levy a nominal amount of penalty as per their banking norms. Penalty on non-payment of the installment on time is Rate of RD interest rate + 2% p.a. However, Partial withdrawal of Kotak Bank RD account is not allowed.

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