Summary: City Union Bank’s published domestic term-deposit schedule effective 21 October 2026 lists a specific 555-day callable tenure under the CUB Fixed Deposit product. The annual rates shown are 7.15% for the general category, 7.35% for eligible senior citizens and 7.40% for eligible super senior citizens. The bank’s product page allows cumulative and non-cumulative structures, with simple-interest payout choices and quarterly compounding for cumulative deposits. Premature closure is permitted, subject to the bank’s published penalty calculation, and loan or overdraft facilities may be available under bank policy. Interest remains taxable, and resident-bank TDS thresholds for Tax Year 2026-27 are governed by section 393 of the Income-tax Act, 2025: ₹50,000 for a person other than a senior citizen and ₹1,00,000 for a senior citizen, subject to the statutory conditions. City Union Bank appears on DICGC’s insured-bank list, but insurance is capped at ₹5 lakh for principal and interest aggregated across branches in the same right and capacity. This article explains the verified product terms without recommending the deposit or predicting future rates.
- Verified 555-Day Rate Card Effective 21 October 2026
- What the CUB Fixed Deposit Product Provides
- Deposit Period, Amount and Interest Choices
- Cumulative and Non-Cumulative Outcomes
- Loan, Overdraft, Nomination and Renewal
- Premature Closure and the 1% Reduction
- Tax Treatment for Tax Year 2026-27
- Interest Is Taxable Even When TDS Is Not Deducted
- Section 393 Thresholds and Rate
- Form 121 for Eligible Nil-Tax Declarations
- DICGC Cover Is an Aggregate Bank-Level Ceiling
- A Neutral Pre-Booking Verification File
- Illustrative Reading of the Rate, Not a Return Promise
- Frequently Asked Questions
- What is City Union Bank’s published rate for the 555-day CUB Fixed Deposit?
- Is the 555-day tenure callable?
- How is premature interest calculated?
- Can interest be paid monthly?
- What are the TDS thresholds for Tax Year 2026-27?
- Does no TDS mean the interest is exempt?
- How much DICGC protection applies?
- Will automatic renewal retain the same 555-day rate?
- Key Takeaways
Verified 555-Day Rate Card Effective 21 October 2026
City Union Bank’s current rate schedule places 555 days in a separate row rather than within a broad range. For domestic callable term deposits, the published rate is 7.15% per annum for the general category, 7.35% for eligible senior citizens and 7.40% for eligible super senior citizens. The rate applicable to a booking depends on the customer category, deposit type, amount, booking date and the bank’s operative terms. A displayed rate should therefore be matched to the deposit receipt before funds are placed.
| Customer category | Published annual rate | Important qualification |
|---|---|---|
| General | 7.15% | Domestic callable 555-day term-deposit row |
| Senior citizen | 7.35% | Eligibility and additional-rate rules apply |
| Super senior citizen | 7.40% | Eligibility and bank classification rules apply |
The same schedule shows different rates for neighbouring tenures, which makes the exact maturity instruction important. A 445-to-554-day deposit, a 555-day deposit and a 556-day-to-three-year deposit are different rate buckets. Automatic renewal may place the maturity proceeds into the tenure and rate available on the renewal date rather than reproduce the original 555-day rate. Depositors should read the renewal instruction recorded in the application and receipt.
What the CUB Fixed Deposit Product Provides
Deposit Period, Amount and Interest Choices
The CUB Fixed Deposit page describes deposits from seven days to ten years. It states that simple interest may be paid monthly, quarterly, half-yearly or annually, while cumulative deposits add interest to principal at the end of every quarter. For individuals, the product page shows a minimum amount of ₹100 in multiples of ₹100. Separate minimums are shown for MSMEs and corporates. Actual channel limits, identity requirements and account-opening conditions should be confirmed with the bank.
Cumulative and Non-Cumulative Outcomes
A cumulative deposit retains interest in the account and compounds it quarterly under the bank’s product description. A non-cumulative deposit distributes interest at the chosen frequency, so the depositor receives cash flows before maturity and the maturity amount does not include retained quarterly interest in the same way. Monthly-payout amounts may be calculated using the bank’s applicable method and can differ from a simple annual rate divided by twelve. The receipt and maturity advice control the contractual amount.
Loan, Overdraft, Nomination and Renewal
City Union Bank states that loan or overdraft facilities and auto-renewal options are available for its fixed deposits. Availability, margin, interest rate, documentation and customer eligibility depend on bank policy. A loan against deposit creates a separate borrowing obligation and may reduce net interest benefit. Nomination should be recorded and checked on the deposit receipt. Joint holders should also confirm operating instructions and the right and capacity in which the deposit is held.
Premature Closure and the 1% Reduction
The bank’s published premature-closure rule states that a 1% penalty is charged on the rate applicable for the period from the deposit date to the pre-closure date or on the original contracted rate, with the lower rate after the penalty being paid. The bank’s separate policy also states that no interest is payable when withdrawal occurs before the minimum required period, currently seven days. The result therefore depends on the actual completed tenure and the rate table that applied on the original booking date.
Premature closure should not be modelled by simply subtracting 1% from the 555-day rate. If the deposit closes early, the relevant comparison includes the rate for the period actually completed. The bank may apply the lower of the post-penalty alternatives stated in its schedule. Depositors should request a pre-closure quote showing principal, completed tenure, applicable rate, penalty, accrued interest and net proceeds before authorising closure.
| Event | Rate basis to verify | Document to retain |
|---|---|---|
| Normal maturity | Contracted 555-day rate and payout option | Deposit receipt and maturity advice |
| Premature closure | Completed-tenure rate, contracted rate and 1% penalty rule | Bank-generated closure calculation |
| Automatic renewal | Rate and tenure prevailing on renewal date | Renewed receipt and updated nomination |
| Loan or OD | Separate borrowing rate, margin and recovery terms | Sanction and lien documents |
Tax Treatment for Tax Year 2026-27
Interest Is Taxable Even When TDS Is Not Deducted
Fixed-deposit interest is taxable according to the depositor’s applicable provisions and method of accounting. TDS is only a collection mechanism. If interest remains below the TDS threshold, the income does not become exempt. Cumulative deposits may create taxable interest accrual before the maturity proceeds are received, depending on the applicable tax treatment. Depositors should reconcile the bank’s interest certificate, Form 26AS, Annual Information Statement and their books or personal records.
Section 393 Thresholds and Rate
For Tax Year 2026-27, section 393(1), Table serial number 5(ii), sets a ₹1,00,000 threshold for a senior citizen and ₹50,000 for a person other than a senior citizen where interest other than interest on securities is paid by a banking company. The Income Tax Department’s published TDS-rate table shows 10% for this category, subject to the Act, PAN requirements and other applicable provisions. Threshold testing generally concerns aggregate interest rather than each deposit receipt viewed separately.
Form 121 for Eligible Nil-Tax Declarations
The Income Tax Department explains that the former Form 15G and Form 15H framework corresponds to section 393(6) under the Income-tax Act, 2025 and uses unified Form 121 for Tax Year 2026-27. A declaration is not an automatic facility for every depositor. The person must satisfy the statutory eligibility conditions, including the nil estimated-tax requirement. Submitting a declaration does not make the interest tax-free and does not correct an invalid eligibility assumption.
DICGC Cover Is an Aggregate Bank-Level Ceiling
DICGC lists City Union Bank Ltd. among insured banks. The insurance ceiling is ₹5 lakh per depositor per bank for principal and interest together, measured in the same right and same capacity. Deposits at different City Union Bank branches are aggregated. Opening several receipts or using several branches does not multiply the cover. Deposits held in different rights or capacities are treated under DICGC rules, and depositors should not assume separation without understanding those rules.
DICGC insurance does not guarantee the contracted interest rate, market liquidity or immediate access in every situation. It applies upon the events and process specified by law, including liquidation, cancellation of licence, a qualifying scheme or specified restrictions. Interest accrued up to the relevant date counts within the ₹5 lakh ceiling. A depositor whose combined principal and interest exceed the ceiling bears exposure above the insured amount.
A Neutral Pre-Booking Verification File
- Save the rate schedule showing the 21 October 2026 effective date and the 555-day row.
- Confirm customer category, callable status, principal, interest option and maturity instruction.
- Review premature-closure, renewal, nomination and loan or overdraft terms.
- Estimate aggregate bank interest for TDS and tax reporting rather than testing one receipt alone.
- Aggregate all City Union Bank balances in the same right and capacity for DICGC analysis.
- Retain the application, receipt, interest certificate, tax statement reconciliation and maturity advice.
Illustrative Reading of the Rate, Not a Return Promise
A quoted annual rate cannot be converted into a guaranteed maturity value without the principal, compounding or payout choice, exact day-count method, tax deductions and contractual terms. A non-cumulative depositor receives periodic interest; a cumulative depositor retains interest for quarterly compounding. Premature closure changes the applicable rate basis. For this reason, any calculator result should be checked against the deposit receipt issued by the bank and should not be presented as a guaranteed net return.
Frequently Asked Questions
What is City Union Bank’s published rate for the 555-day CUB Fixed Deposit?
The schedule effective 21 October 2026 shows 7.15% for the general category, 7.35% for eligible senior citizens and 7.40% for eligible super senior citizens.
Is the 555-day tenure callable?
The cited domestic schedule is for callable term deposits, so premature closure is permitted subject to the bank’s applicable terms and penalty calculation.
How is premature interest calculated?
The bank applies its completed-tenure and contracted-rate comparison with the published 1% penalty rule. A bank-generated closure quote should be obtained.
Can interest be paid monthly?
The product page states that simple interest payout options include monthly, quarterly, half-yearly and annual frequencies; cumulative deposits compound quarterly.
What are the TDS thresholds for Tax Year 2026-27?
Section 393 states ₹1,00,000 for a senior citizen and ₹50,000 for a person other than a senior citizen for the relevant bank-interest category, subject to statutory conditions.
Does no TDS mean the interest is exempt?
No. Taxability and TDS are different. Interest may remain taxable even if no tax is deducted by the bank.
How much DICGC protection applies?
The maximum is ₹5 lakh for principal and interest together per depositor per bank in the same right and capacity, aggregated across branches.
Will automatic renewal retain the same 555-day rate?
Not necessarily. Renewal ordinarily uses the tenure and rate available under the bank’s instructions on the renewal date, so the new receipt must be checked.
Key Takeaways
- The verified 555-day rates are 7.15%, 7.35% and 7.40% for the stated customer categories, effective 21 October 2026.
- The exact booking category, payout option, callable status and renewal instruction should appear on the receipt.
- Premature closure uses the bank’s completed-tenure comparison and published 1% penalty rule.
- TDS thresholds do not determine whether interest is taxable.
- DICGC cover is capped at ₹5 lakh for principal and interest aggregated at the bank level in the same right and capacity.
*****
Disclaimer: This article is a neutral educational summary of publicly displayed terms for City Union Bank’s CUB Fixed Deposit and the 555-day rate row checked for 31 October 2026. It is not an offer, recommendation, ranking, solicitation, personalised investment opinion or assurance that the product is suitable, available through every channel, or will retain the same rate. Deposit rates, customer categories, eligibility, minimum amounts, payout calculations, day-count methods, premature-closure terms, auto-renewal instructions, nomination procedures, loan or overdraft facilities and operational requirements may change or may be applied differently under the bank’s governing documents. The maturity amount and net return depend on the actual receipt, principal, booking date, interest option, tax position, deductions and any early closure. TDS thresholds do not make interest exempt, and eligibility for Form 121 must be established under the applicable income-tax law. DICGC cover is subject to statutory events, aggregation rules, the same-right-and-capacity principle and the ₹5 lakh combined principal-and-interest ceiling; it is not a guarantee of immediate liquidity or recovery above that amount. Depositors should verify the current bank webpage, deposit receipt, tax provisions and DICGC rules immediately before acting and should obtain professional tax or financial advice based on 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.
