Kotak Mahindra Bank hikes RD interest rates by up to 75 bps on certain tenures

The Kotak Mahindra Bank has hiked the recurring deposits (RD) interest rates. The interest rates on RD accounts have been revised from December 28, 2022, i.e., today. This is the second time the private sector bank has increased the RD account interest rate this month. The last time the bank raised the RD interest rate was on December 9, 2022. Post the latest revision, the private sector bank is offering an interest rate of 7 per cent interest rate per annum on RD tenure between 15 months to 21 months.

The interest rate on the RD account has been hiked by up to 75 basis points (100 basis points/bps = 1%) on certain tenures. The bank has increased RD's interest rate on the tenure of 6 months, 12 months, 15 months, 18 months, and 21 months.

Kotak Mahindra Bank RD interest rate for individuals

Tenure	RD Interest rate per annum (%) on December 9, 2022	RD Interest rate per annum (%) on December 28, 2022
6 months	5.00	5.75
12 months	6.25	6.75
15 months	6.50	7.00
18 months	6.50	7.00
21 months	6.50	7.00

Source: Kotak Mahindra Bank website

The interest rate offered on an RD account opened by a senior citizen has also been raised. The revision on RD account interest rate is certain tenures only and by up to 50 bps. The RD account interest rate has been increased for 6 months, 12 months, 15 months, 18 months, and 21 months.

Do note that senior citizens planning to open recurring deposit accounts will be eligible for higher interest rates in the Kotak Mahindra Bank. The highest interest rate offered on senior citizen RD accounts is 7.50 per cent per annum for tenure between 15 months and 21 months.

Kotak Mahindra Bank RD interest rate for senior citizens

Tenure	RD Interest rate per annum (%) on December 9, 2022	RD Interest rate per annum (%) on December 28, 2022
6 months	6.00	6.25
12 months	6.75	7.25
15 months	7.00	7.50
18 months	7.00	7.50
21 months	7.00	7.50

Source: Kotak Mahindra Bank Website

Kotak Mahindra Bank is offering RD tenure of a minimum of 6 months and a maximum of 10 years.

Penalty on RD account
An RD account holder is liable to pay a penalty if the scheduled RD instalment payment is delayed or if the RD account is prematurely withdrawn.

According to the Kotak Mahindra Bank 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 penalty applicable for 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.