Summary : Dhanlaxmi Bank’s official interest-rate page, checked on 5 November 2026, shows a distinct 1111-day row within domestic and NRO term deposits below ₹3 crore, effective 1 October 2026. The published general rate is 7.25% per annum. Eligible senior citizens receive an additional 0.50% for domestic term deposits of one year and above, making the stated rate 7.75% when that benefit applies. The deposit is callable: premature closure is available subject to a 1% penalty for deposits of ₹5 lakh and above and 0.50% for deposits below ₹5 lakh, together with the bank’s completed-tenure rate calculation. Interest is taxable even when no tax is deducted at source. DICGC protection for an insured bank is capped at ₹5 lakh for principal and interest together per depositor per bank in the same right and capacity. This article is a neutral verification guide, not a ranking, return promise or recommendation.
- Verified Rate Card Effective 1 October 2026
- Callable Deposit Terms and Interest Method
- Callable Means Early Closure Is Permitted
- Cumulative and Payout Choices Change Cash Timing
- Premature Closure: Two Rate Questions and a Penalty
- Senior-Citizen Benefit Must Be Matched to Eligibility
- Tax Treatment for Tax Year 2026-27
- Interest Remains Taxable Even Without TDS
- Section 393 Thresholds
- Form 121 Is Conditional
- DICGC Cover Is Aggregated at Bank Level
- Neutral Pre-Booking Verification File
- Frequently Asked Questions
- What is the published general rate for 1111 days?
- What is the rate for an eligible senior citizen?
- Is the 1111-day deposit callable?
- What premature-closure penalty applies?
- Is interest paid if the deposit is closed before seven days?
- Does no TDS mean the interest is tax-free?
- How much DICGC cover is available?
- Will automatic renewal preserve the 7.25% rate?
- Key Takeaways
Verified Rate Card Effective 1 October 2026
The bank’s official page groups domestic and NRO deposits below ₹3 crore in the same rate table. The 1111-day row carries 7.25% per annum for the general category. The page states that eligible senior citizens receive an additional 0.50% per annum for domestic term deposits of one year and above. NRO deposits should not be assumed to receive the domestic senior-citizen addition merely because they appear in the combined table; the customer category and account type must be confirmed on the receipt.
| Booking category | Published annual rate | Verification point |
|---|---|---|
| General domestic / eligible table category | 7.25% | 1111-day row; deposit below ₹3 crore |
| Eligible senior citizen domestic deposit | 7.75% | 7.25% plus published 0.50% addition |
| NRO or other customer category | Confirm with bank | Do not assume domestic senior-citizen benefit |
The page also displays ordinary tenure ranges and other special rows such as 370 and 666 days. The depositor must select the exact 1111-day tenure—described for online opening as 36 months and 15 days—rather than a nearby range. A maturity instruction or automatic renewal may move the proceeds into the tenure and rate available on the renewal date. The original rate does not automatically continue after maturity.
Callable Deposit Terms and Interest Method
Callable Means Early Closure Is Permitted
A callable term deposit can be closed before contractual maturity under the bank’s terms. That flexibility is different from a non-callable bulk deposit, where early withdrawal is restricted. The current retail row should not be confused with the bank’s separate bulk-deposit and non-callable schedules. The application and receipt should expressly identify principal, customer category, tenure, payout option, callable status and maturity instruction.
Cumulative and Payout Choices Change Cash Timing
A term deposit may retain interest for compounding or pay interest at an agreed frequency, depending on the option offered and selected. The annual percentage rate does not by itself establish the exact maturity amount. Principal, day-count convention, compounding or payout frequency, tax deduction and premature closure all affect the cash result. A bank-generated receipt or maturity calculation is more reliable than a simple interest estimate prepared from the headline rate.
Premature Closure: Two Rate Questions and a Penalty
The bank’s published page states that premature closure attracts a penalty of 1% for deposits of ₹5,00,000 and above and 0.50% for deposits below ₹5,00,000. It also states that interest on premature withdrawal is paid at the rate applicable at the time of deposit to the amount and period for which the deposit actually remained with the bank, irrespective of the contracted tenure and rate. The deposit policy further explains that the effective rate is the lower of the applicable completed-period rate after penalty and the original contracted rate after penalty.
It is therefore incorrect to estimate premature proceeds by merely subtracting the penalty from 7.25% and applying that rate for the actual days. The completed tenure must first be mapped to the rate schedule effective on the original booking date. The lower-rate comparison and the deposit-size penalty are then applied under the bank’s terms. If withdrawal occurs before the seven-day minimum for a domestic rupee term deposit, the policy states that no interest is payable.
| Closure event | Rate basis | Evidence to obtain |
|---|---|---|
| Maturity at 1111 days | Contracted rate and selected interest option | Deposit receipt and maturity advice |
| Early closure below ₹5 lakh | Completed-tenure comparison less 0.50% | Bank pre-closure quote |
| Early closure ₹5 lakh or above | Completed-tenure comparison less 1.00% | Bank pre-closure quote |
| Closure before seven days | No interest under published policy | Closure statement |
| Renewal at maturity | Rate and tenure prevailing on renewal date | New deposit receipt |
Senior-Citizen Benefit Must Be Matched to Eligibility
The published addition applies to eligible senior citizens on domestic term deposits of one year and above. The bank’s customer-definition, age evidence, residence status, joint-holding rules and account type determine whether the benefit is available. A depositor should not infer eligibility from being the second joint holder or from receiving a senior rate at another bank. The rate printed on the issued receipt should be checked immediately and any discrepancy raised before the booking is allowed to stand.
The additional rate can also affect a premature-closure calculation because the applicable rate for the completed period depends on the schedule and eligibility on the original deposit date. A bank-generated calculation should show the base rate, senior addition where applicable, completed tenure, penalty and final interest. General online calculators may not reproduce the contractual method.
Tax Treatment for Tax Year 2026-27
Interest Remains Taxable Even Without TDS
Interest from the deposit is taxable under the applicable income-tax provisions and the depositor’s facts. TDS is a collection mechanism, not an exemption. For cumulative deposits, tax reporting may arise before cash is received at maturity. The depositor should reconcile the bank’s interest certificate with Form 26AS, the Annual Information Statement and the return or books. Interest across deposits and branches should not be tested receipt by receipt when the law requires aggregation.
Section 393 Thresholds
For Tax Year 2026-27, section 393 of the Income-tax Act, 2025 provides the relevant bank-interest thresholds of ₹1,00,000 for a senior citizen and ₹50,000 for a person other than a senior citizen. These thresholds address when tax is deducted; they do not decide the final tax liability. PAN rules, the applicable deduction rate and other provisions must also be considered. A person with several deposits should estimate total interest payable or credited by the bank during the tax year.
Form 121 Is Conditional
The Income Tax Department’s portal explains that the earlier Form 15G and Form 15H declarations correspond to the unified Form 121 under section 393(6) for Tax Year 2026-27. The declaration is available only when the statutory conditions are satisfied, including the estimated nil-tax requirement. Filing it does not make deposit interest tax-free, and a depositor should not submit it merely to avoid cash-flow inconvenience.
DICGC Cover Is Aggregated at Bank Level
Dhanlaxmi Bank is a banking company and deposits with an insured bank are subject to the DICGC framework. The maximum insurance amount is ₹5 lakh for principal and interest together for each depositor in the same right and same capacity at the same bank. All eligible deposits held across branches of Dhanlaxmi Bank in that right and capacity are aggregated. Several receipts, digital and branch accounts or different branches do not multiply the ceiling.
Different rights and capacities are treated according to DICGC rules, but account titling should not be manipulated or assumed to create separate coverage without satisfying those rules. Insurance applies through the statutory process on specified events; it is not a promise of immediate liquidity, timely maturity payment or recovery above the ceiling. Interest accrued to the relevant date forms part of the ₹5 lakh combined limit.
Neutral Pre-Booking Verification File
- Save the official rate page showing the 1 October 2026 effective date and 1111-day row.
- Confirm that the principal is below ₹3 crore and the deposit is the callable retail category.
- Check senior-citizen eligibility, account type, interest option and exact tenure on the receipt.
- Read the premature-closure calculation, penalty slab and minimum seven-day rule.
- Estimate aggregate bank interest for TDS and return reporting.
- Aggregate all Dhanlaxmi Bank deposits in the same right and capacity for DICGC analysis.
- Retain nomination, application, receipt, interest certificate and maturity or closure advice.
Frequently Asked Questions
What is the published general rate for 1111 days?
The official rate page effective 1 October 2026 shows 7.25% per annum for the 1111-day row within the relevant deposit table.
What is the rate for an eligible senior citizen?
The published 0.50% domestic senior-citizen addition produces 7.75% for an eligible 1111-day domestic booking.
Is the 1111-day deposit callable?
Yes. The cited retail deposit is callable, so premature closure is permitted subject to the applicable rate calculation and penalty.
What premature-closure penalty applies?
The page states 0.50% for deposits below ₹5 lakh and 1% for deposits of ₹5 lakh and above.
Is interest paid if the deposit is closed before seven days?
The deposit policy states that no interest is paid when a domestic rupee term deposit is withdrawn before the minimum seven-day period.
Does no TDS mean the interest is tax-free?
No. TDS and final taxability are different; the interest may remain taxable even when no deduction is made.
How much DICGC cover is available?
The ceiling is ₹5 lakh for principal and interest together per depositor per bank in the same right and capacity, aggregated across branches.
Will automatic renewal preserve the 7.25% rate?
Not necessarily. Renewal ordinarily follows the rate and tenure available under the bank’s instructions on the renewal date.
Key Takeaways
- The verified 1111-day general rate is 7.25% effective 1 October 2026 for the cited deposit table.
- An eligible domestic senior citizen receives the published 0.50% addition, subject to bank rules.
- Premature closure depends on the completed-tenure rate, contracted rate and deposit-size penalty.
- TDS thresholds do not make interest exempt from income tax.
- DICGC’s ₹5 lakh ceiling includes principal and interest and aggregates deposits at the bank level.
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Disclaimer: This article is a neutral educational summary of Dhanlaxmi Bank’s publicly displayed domestic and NRO term-deposit rate schedule and deposit policy, checked on 5 November 2026. It is not an offer, invitation, recommendation, ranking, solicitation, personalised investment advice, credit assessment or assurance that the 1111-day deposit is suitable, available through every channel or will continue at the stated rate. Rates, eligibility, customer categories, minimum and maximum amounts, payout and compounding conventions, day-count methods, premature-closure calculations, penalties, auto-renewal, nomination, loans against deposits and operational requirements may change or may differ under the governing application and receipt. The exact contractual result depends on the booking date, principal, account type, holder status, interest option, tax deductions and any early closure. TDS thresholds do not make interest exempt, and Form 121 may be used only when the statutory conditions are met. DICGC insurance is subject to the Deposit Insurance and Credit Guarantee Corporation Act, insured-bank status, statutory events, aggregation, same-right-and-capacity rules and the ₹5 lakh combined principal-and-interest ceiling; it does not guarantee immediate access or amounts above the ceiling. Readers should verify the bank’s current official page and receipt, applicable income-tax provisions and DICGC rules immediately before acting and should seek professional tax or financial advice suited to their circumstances. TaxGuru accepts no responsibility or liability for rate changes, calculation differences, tax consequences, uninsured balances, delayed access, bank action or any loss arising from reliance on this article.
