Union Bank FD Scheme : If you are planning to invest 20% of your monthly or annual income into a secure and low-risk financial instrument, Union Bank of India’s Fixed Deposit (FD) scheme might be the perfect option for you. Fixed Deposits are considered one of the safest and most reliable forms of investment, especially for conservative investors who prioritize capital safety along with steady returns. In recent times, despite several cuts in the repo rate by the Reserve Bank of India (RBI), Union Bank continues to offer competitive interest rates on their FD schemes, making it an attractive investment avenue. Let us explore all the important details about the Union Bank of India’s FD plans and how you can benefit from them.
Union Bank FD Scheme : Union Bank of India FD – Tenure and Investment Options
Union Bank of India allows investors to open Fixed Deposit accounts for a tenure ranging from as short as 7 days to as long as 10 years. This flexible tenure system ensures that investors can choose their investment period based on their financial goals—be it short-term liquidity needs or long-term wealth preservation. The minimum deposit amount is quite affordable, and there is no upper limit, making it suitable for both small and large investors.
Being a public sector bank, Union Bank of India enjoys the trust of millions across the country. Moreover, since the deposits in Indian banks are insured under DICGC (Deposit Insurance and Credit Guarantee Corporation) up to ₹5 lakh per account, your funds are relatively safe.
Union Bank FD Scheme : Impact of Repo Rate Cuts on FD Interest Rates
The Reserve Bank of India had reduced the repo rate multiple times in the current year — including cuts in February, April, and June. However, in its August policy meeting, the RBI decided to keep the repo rate unchanged at 5.50%. Following the series of rate cuts earlier in the year, most banks revised their interest rates on deposits downward, and Union Bank of India was no exception.
Despite the cut in interest rates, Union Bank continues to offer one of the better FD interest rates in the public sector space. This makes it a valuable opportunity for investors looking to lock in funds for moderate to high returns depending on their age group and investment tenure.
Union Bank FD Scheme : Current Interest Rates Offered by Union Bank of India
Union Bank of India currently offers interest rates ranging from 3.40% to 7.35% on its Fixed Deposits, depending on the duration of the investment and the category of the investor.
Here is a brief breakdown:
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Regular Citizens: Up to 6.60% per annum
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Senior Citizens (Age 60-80): Up to 7.10% per annum
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Super Senior Citizens (Above 80): Up to 7.35% per annum
For a 2-year FD, which is considered an ideal medium-term investment window, the bank offers:
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Regular Citizens: 6.50% interest
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Senior Citizens: 7.00% interest
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Super Senior Citizens: 7.25% interest
These rates are quite appealing, especially when compared with inflation and the current volatility in equity markets.
Union Bank FD Scheme : Investment Example: Earn ₹30,908 Interest on ₹2,00,000 in 2 Years
To better understand the returns, let’s take a real example.
Suppose you invest ₹2,00,000 in a 2-year Fixed Deposit at Union Bank of India. The maturity amount and interest earned will vary depending on your age category.
For Regular Citizens:
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Interest Rate: 6.50%
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Maturity Amount: ₹2,27,528
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Total Interest Earned: ₹27,528
For Senior Citizens:
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Interest Rate: 7.00%
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Maturity Amount: ₹2,29,776
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Total Interest Earned: ₹29,776
For Super Senior Citizens:
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Interest Rate: 7.25%
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Maturity Amount: ₹2,30,908
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Total Interest Earned: ₹30,908
As evident, the interest return increases with age category due to the higher rates offered by the bank to elderly depositors. For someone in the super senior category, earning over ₹30,000 in just two years from a ₹2 lakh investment is a significant return from a safe, government-backed financial product.
Key Benefits of Union Bank of India Fixed Deposit
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Assured Returns: Unlike market-linked instruments, FDs offer fixed returns regardless of market conditions.
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Capital Protection: Ideal for risk-averse investors who want to safeguard their principal.
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Flexible Tenures: From 7 days to 10 years—choose what suits your financial plan.
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Special Rates for Senior Citizens: Additional interest rates are provided to people above 60 years.
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Loan Against FD: You can avail loans up to 90% of the FD amount in case of urgent financial need.
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Quarterly/Monthly Interest Payout Options: Depending on your income needs, you can opt for periodic interest payouts.
Who Should Invest in Union Bank’s FD Scheme?
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First-time Investors: Looking for low-risk, guaranteed returns.
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Retirees & Senior Citizens: Wanting to ensure a steady income from interest payouts.
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Salaried Individuals: Who want to invest a part of their salary regularly in a secure product.
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Conservative Investors: Who prefer traditional investment options over volatile equity markets.
How to Open an FD with Union Bank of India
Opening an FD with Union Bank is simple and can be done both online and offline. You can visit your nearest Union Bank branch with your KYC documents (ID proof, address proof, PAN card) and fill out the FD application form. Alternatively, existing customers can log in to Union Bank’s online banking portal or mobile app to open a fixed deposit within minutes.
Conclusion
Union Bank of India’s Fixed Deposit schemes are a safe, stable, and rewarding investment option, especially in times when market instruments may carry high risk and uncertainty. With interest rates up to 7.35% for super senior citizens, and a guaranteed return structure, this FD scheme can help you meet your short and long-term financial goals without taking unnecessary risks.
If you’re considering putting aside a portion of your income for secure returns, this could be the ideal time to lock in your money with Union Bank of India. With a modest investment of ₹2,00,000, you can earn up to ₹30,908 in fixed interest in just two years—a solid return from a trusted public sector bank.
