UCO Bank has always been popular with individuals for the monthly income schemes that it launches.
It first began the scheme in 2013, when interest rates were way beyond the 9 per cent. Over the last few years, interest rates have fallen and so the bank has dropped the interest rates on its deposits as well.
Interest under the UCO Bank Monthly Income Scheme
Interest rates on the scheme are 7.25 per cent and 7.75 per cent for senior citizens. Remember, these are annual rates, so your interest would be divided by 12 months and you will receive the interest accordingly.
Minimum and maximum amount under the scheme
You can invest a minimum amount of Rs 50,000 under the UCO Bank Monthly Income Scheme, while the maximum amount is Rs 1 crore.
Remember, there would be a TDS that would be applicable under the scheme. So, if your interest income crosses Rs 10,000 every year, there would be a TDS.
Other details of the UCO Bank Monthly Income scheme
The UCO Bank monthly income scheme allows you a nomination facility and there is also an overdraft that is possible against the fixed deposits.
Remember, that there would be a premature charge of 1 per cent that would be applicable on the deposits.
Should you invest in the UCO Bank Monthly Income Scheme?
We believe that the post officce monthly income scheme is much better. This is because the interest rate is as high as 7.80 per cent. Remember, that the post office revises interest rate every quarter. However, we do not see the interest rates falling dramatically.
The interest rate of the post office scheme is always likely to be better than that of the UCO Bank Monthly Income Scheme, which is why that option is much better.
Also, we believe that interest rates have fallen dramatically in the last few months and we do not see them falling too much from these levels.
Hence, you are not getting really too much out of this monthly income scheme. In fact, you can get almost 1 per cent higher in company deposits as compared to the UCO Bank Monthly Income Scheme.
There are many AAA rates monthly deposits like that from Bajaj Finance, which offer you an interest rate of 8.25 per month. This is almost 100 basis points or 1 per cent over and above what UCO Bank offering.