Result
Key Features of Union Bank Fixed Deposit
- Tenure: The tenure of fixed deposits offered by Union Bank of India spans from seven days to ten years.
- Guaranteed returns: The fixed deposit comes with a guaranteed income in the form of interest earned owing to fixed rates.
- Minimum amount: The minimum amount for the fixed deposit is ₹100.
- Maximum amount: There are no maximum amount criteria for Union Bank FDs. One can invest as much as he/she wants. However, in the case of Union Bank of India Tax Saving FD, individuals can invest a maximum of ₹1.5 lakh only.
- Interest rates: The rates of interest on the fixed deposit range between 3% and 6.5%.
- Security: The fixed deposits up to ₹5 lakh are insured as per the Depositors Insurance Guarantee Scheme. In case of bankruptcy, depositors are likely to get a maximum of ₹5 lakh, including principal and interest.
- Loan against fixed deposit: Another prominent feature of the Union Bank of India FD is a loan against FD. Depositors can borrow loans up to 90% of their deposit amount.
- Nomination: Fixed deposits offered by Union Bank also allow nomination facility to depositors with the need of opening a separate fixed deposit account.
- FD calculator: Depositors can use the Union Bank fixed deposit calculator and get an estimate of returns that they will receive after the maturity period.
Advantages of Union Bank FD Calculator
- The FD interest rate calculator provides reliable estimates of returns accrued to the depositor. It helps in sound financial planning and aids in decision making.
- Several factors like the prevailing interest rate, principal amount, compounding frequency and tenure affect the total interest payout. Therefore, depositors can use the Union Bank FD calculator multiple times and analyse which factors have the biggest impact on returns. After this, they can modify the corresponding factor and earn higher interest.
- Another advantage of using the Union Bank FD calculator is that it allows depositors to compare the net maturity amount offered by different banks and non-banking financial institutions.
- The Union Bank FD rates calculator is quite easy to use. Depositors can access all the information in a transparent and simple format. The FD calculator shows the interest amount, opening and closing balance for every year during the FD tenure.
How Is Union Bank FD Interest Rate Calculated?
Simple Interest
First, we shall consider the simple interest method. Simple interest represents an interest income which one earns by depositing the money for a prefixed tenure and a fixed interest rate. The formula of simple interest is (P*R*T)/100.
Here,
P stands for the principal amount
R stands for the interest rate on the Union Bank FD
T stands for the time period
Mr Kumar is looking to invest ₹50,000 for five years at the interest rate of 6% annually. In this case, the principal amount is ₹50,000, the time period is five years and the interest rate is 6% annually. Let’s put this information in the formula and find out the simple interest payout.
Simple Interest = (50000*6*5)/100 = ₹15000
Maturity Amount = ₹65000
Compound Interest
Now, let’s consider the compound interest method.
Compound interest is the interest income earned by depositors on cumulative interest and the principal amount. Using the compounding effect, depositors would be in a position to earn interest on interest. The longer the tenure, the higher shall be the interest payout. The formula of compound interest is as follows:
A = P (1+r/n) ^ (n * t)
Here,
A stands for the matured amount including principal and interest
P is the invested amount
r is the rate of interest on the FD
n represents the compounding frequency, i.e., how many times interest is compounded
t is the tenure of the fixed deposit
Let’s continue with the above example in which Mr Kumar wants to invest ₹50,000 for a tenure of five years and the interest rate is 6% compounded annually. After putting all these values in the formula, we get:
Maturity Amount = 50000(1+0.06/1)^(1*5) = ₹66,988
Hence, the interest amount = A-P = ₹16,988
If you are using the Union Bank FD calculator, then one does not have to do all these calculations. Depositors can simply put the information in the online tool and upon clicking the result option, they will get an estimate of interest and total maturity amount.
What Are Union Bank Interest Rates?
Tenure | Interest Rate |
7-14 days | 3.00% |
15-30 days | 3.00% |
31-45 days | 3.00% |
46-90 days | 4.05% |
91-120 days | 4.30% |
121-180 days | 4.40% |
180 days to less than one year | 5.25% |
1 year | 6.30% |
More than one year to 398 days | 6.30% |
399 days | 7% |
400 days-2 years | 6.30% |
More than 2 years to less than 3 years | 6.30% |
3 years | 6.50% |
3-5 years | 6.70% |
5-10 years | 6.70% |
Summing Up
Union Bank FD Calculator : FAQs
The highest interest rate offered by Union Bank on fixed deposits is 7% for a tenure of 399 days.
Yes, you can prematurely withdraw fixed deposits. However, Union Bank of India can levy a penalty for such actions. The penalty amount varies from one FD to another and it is mentioned in the FD application form.
Yes, your FD with Union Bank is safe because the Reserve Bank of India (RBI) will never allow a scheduled commercial bank like Union Bank to collapse and you will always have access to your money. Moreover, even in extreme circumstances, fixed deposits up to ₹5,00,000 are insured by Deposit Insurance and Credit Guarantee Corporation (DICGC).