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Union Bank of India Recurring Deposit Interest Rates 2022

Recurring deposits are the investment vehicle of choice for a variety of investor personas but especially for investors in their first job and for investors who are retired or nearing retirement. For the younger lot, recurring deposits represent a minimal risk haven where they can begin their investment journey and expect to experience first-hand the benefits of saving and having their capital earn for them. For the mature lot, recurring deposits are exactly the risk free investment that they need now that they need to safeguard all the capital coming in, and ensure a fixed amount of income in the years to come. For this lot, in most cases, they might have enjoyed the exponential growth from high risk investment in the years when they had a steady income ahead of them, but as they near retirement, they might want to play it safe.

Benefits of Recurring Deposits:

Minimal risk: 

Safe is indeed the first word that one thinks of when it comes to recurring deposits and fixed deposits. This is because the bank makes a commitment to repay the investor’s money by a fixed maturity date and with a fixed sum of interest. 

Start small; start earning: 

Recurring deposits have an edge over fixed deposits, however, because of the concept of compounding. Instead of Raj waiting from January to December to collect Rs 12000, wherein he will start earning interest in December, Raj can instead invest Rs 1,000 from January onwards and begin earning interest on the amount. He starts earning interest from January instead of December, which means that in the end, he is able to take home a higher amount as his interest earnings. 

Savings encouraged: 

Additionally, the chances of Raj forgoing his savings because he got carried away during an Independence Day sale in August or the Black Friday sales at the end of November are lower, because well… Raj has already invested the capital. It is tied up in his RD and therefore is not available for wasteful spending or splurging. 


Most recurring deposits can be treated as collateral against which you can obtain a loan. 

In addition, specific to Union Bank recurring deposit

Step up/ Step down feature: You can step up your investment amount at any point, to 10x your core amount (which is basically the base amount you agreed to for your installments). If your core amount was Rs 1000, you can Step Up your installment amount to up to Rs 10,000. You can also go back and Step Down the amount all the way down to the initial core amount, but not below it at any point. 

Affordable minimum core amount: The Union Bank recurring deposit minimum amount is Rs 100, which is affordable for most people. The maximum amount is Rs 100,000 

Premature closure: This feature is available with your Union Bank recurring deposit as per the bank’s website. The bank also promises to pay interest earned until the time of premature closure, without any penalties. 

How to get exact Union Bank of India RD Interest Rates

Use an online RD calculator to figure out how much interest you will be able to generate at the end of your period of investment with Union Bank. 

Union Bank RD interest rate, as per the bank’s website  are as follows: 

Period Interest Rate
7 – 14 Days 3.00%
15 – 30 Days 3.00%
31 – 45 Days 3.00%
46 – 90 Days 3.50%
91 – 120 Days 3.75%
121 to 180 Days 4.30%
181 Days to <1 Year 4.40%
1 Year 5.00%
>1 Year to 2 Years 5.10%
>2 Year to 3 Years 5.30%
>3 Years to 5 Years 5.40%
>5 Years to 10 Years 5.50%

These rates have been uploaded towards the tail end of 2021 and can therefore be anticipated to hold good for 2022, but the bank can change the rates at any point of time. 

Making RD investments like a pro investor

Compare: The one thing that all smart, successful investors have in common is that they make apples to apples comparisons for all their investments, whether they are famous stock market investors like Warren Buffet or the old neighbors next door who have inched up their lifestyle bit by bit, due to careful and diligent fixed income investments. You too must compare the interest rates, fees and charges and penalties for non payment offered by various banks. Union Bank, for example, scores brownie points for allowing you to close your RD prematurely, without charging you any penalties. 

Diversify: First of all, diversify banks. Make sure that your entire life savings (or even anything more than 20% of your savings) are not parked with the same financial institution. 

Choose scheduled banks for all your investments.

If you do not compulsorily have to accept low risk, fixed income instruments, consider having a few RDs, and other fixed income investments, and also consider (after substantial research) the possibility of higher earnings in investments that come with a risk component. 


Union Bank’s RD interest rates are very competitive as per the market average and could represent a good investment option, especially for investors seeking an avenue for earnings that offers fixed income and minimal risk. 

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