Saving regularly is a proven way to build wealth steadily, and recurring deposits (RDs) are a simple, disciplined tool to do exactly that. Union Bank of India offers recurring deposits with a variety of tenures, guaranteed interest rates and additional benefits for senior citizens, making RDs suitable for savers who prefer predictable returns and low risk.
The Union Bank RD interest rates for 2025 follow the bank’s fixed deposit rate structure. Rates go up to 7.30% per annum for general customers and up to 7.80% for senior citizens for specific tenures. Below we outline the key features, the current rate structure, benefits for seniors and NRIs, and practical points to consider before opening an RD with Union Bank.
About Union Bank of India
Union Bank of India is one of the major public sector banks in the country, with an extensive branch network and well-developed digital banking platforms. Among its suite of deposit products, recurring deposits are popular because they encourage regular savings through affordable monthly instalments while providing fixed returns.
Union Bank’s RD options include very low minimum instalments—starting from ₹50 on the Cumulative Deposit scheme and ₹100 on the Monthly Plus scheme—so you can begin saving with minimal outlay. The rate you earn depends on the chosen tenure and follows the bank’s fixed deposit rates for the same period. In addition, Union Bank offers loan and overdraft facilities against the balance of your RD, which can be useful when short-term liquidity is needed.
Union Bank RD Interest Rates 2025
Union Bank does not publish a separate RD rate card; instead, RD rates correspond to fixed deposit rates for the same tenor. The table below lists the recurring deposit interest rates for deposits under ₹3 crores, effective in 2025.
| Period | General Public (p.a.) | Senior Citizens (p.a.) |
|---|---|---|
| 7 to 45 days | 3.50% | 4.00% |
| 46 to 90 days | 4.50% | 5.00% |
| 121 to 180 days | 5.00% | 5.50% |
| 181 to 332 days | 6.35% | 6.85% |
| 333 days | 7.00% | 7.50% |
| 1 year | 6.80% | 7.30% |
| 399 days | 7.00% | 7.50% |
| 456 days | 7.30% | 7.80% |
| 997 days | 6.40% | 6.90% |
| 3 years | 6.70% | 7.20% |
| 3 years to 5 years | 6.50% | 7.00% |
| More than 5 years to 10 years | 6.50% | 7.00% |
Union Bank RD for Senior Citizens
Senior citizens earn a higher rate on Union Bank RDs compared with regular customers. For example, a one-year RD yields 6.80% for general customers and 7.30% for senior citizens. While the extra 0.5% may seem modest, over multi-year periods that incremental interest can significantly boost total returns.
Union Bank RD for NRI Customers
Union Bank offers recurring deposits for Non-Resident Indians through NRE and NRO accounts. NRI RDs follow the applicable NRE/NRO fixed deposit rate slabs for the chosen tenure. These options provide NRIs a safe and predictable route to accumulate savings in India, but it is advisable to confirm the latest NRE/NRO RD rates and any regulatory considerations before investing.
Benefits of Opening a Union Bank RD
- Easy to start: Start with small monthly instalments from as little as ₹50, making RDs accessible to most savers.
- Flexible tenure: Tenures range broadly from 7 days up to 10 years, allowing you to match the deposit to your financial goals.
- Assured returns: Interest rates are fixed for the chosen tenure, so you know the expected outcome at maturity.
- Loan facility: Union Bank permits loans or overdrafts against RD balances, offering a funding option without breaking the deposit.
- Senior citizen benefit: Customers aged 60 and above are eligible for higher interest rates—typically up to 0.5% extra per annum.
- No market risk: RDs provide guaranteed returns without exposure to equity or commodity market volatility.
Example of RD Earnings
As an illustration, depositing ₹5,000 per month into a Union Bank RD for three years at an interest rate of 6.70% p.a. will grow to roughly ₹2 lakh at maturity, including interest. This example demonstrates how regular, modest contributions compound into a meaningful sum over time.
What to Remember Before Opening a Union Bank RD
- Interest on recurring deposits is typically compounded quarterly and paid at maturity; confirm compounding frequency for the specific scheme you choose.
- Premature withdrawal rules and penalties vary by scheme. In many cases, early closure results in lower interest and a possible penalty (often around 1%). Some schemes may be more lenient on delayed instalments—always read the terms and conditions before opening the RD.
- TDS is applicable if annual interest exceeds the prescribed limit (for example, interest above ₹40,000 for general customers and ₹50,000 for senior citizens). Eligible taxpayers can submit Form 15G or 15H to avoid TDS where appropriate.
- Rates can change, so check the latest Union Bank recurring deposit interest rates before booking an RD to ensure you lock in the best available return for your chosen tenor.
How to Open a Union Bank RD
Opening a recurring deposit with Union Bank is straightforward and can be done through multiple channels:
- Internet banking on Union Bank’s online portal
- Union Bank’s mobile app (Vyom or the bank’s current app)
- By visiting your nearest Union Bank branch in person
From the bank’s portal or app, navigate to the Deposits section, select Recurring Deposit, choose the tenure and monthly instalment amount, and confirm. Once set up, the RD will start immediately and can be tracked online through internet banking or the mobile app.
Union Bank recurring deposits offer a safe and predictable way to grow savings, with competitive rates, senior citizen benefits and options for NRIs. They are well suited for savers who want low-risk accumulation through regular contributions.
FAQs on Union Bank RD Interest Rates
Can I take a loan against my RD in Union Bank?
Yes. Union Bank provides loan and overdraft facilities against RD balances. Specific terms and the amount available as loan depend on the scheme and prevailing bank policies.
Are Union Bank RD interest rates different for NRI customers?
Yes. NRIs can open RDs under NRE or NRO accounts, and those RD rates follow the NRE/NRO fixed deposit slabs applicable for the selected tenure.
What is the tenure range available for Union Bank recurring deposits?
Tenures for Union Bank RDs range from as short as 7 days up to 10 years. The bank also maintains specific slabs within that range that may offer slightly higher rates for certain periods, so review available tenures when choosing your RD.