Union Bank of India 444-Day Callable Fixed Deposit: October 2026 Rates, DICGC and Tax Guide

Summary: Union Bank of India’s domestic/NRO term-deposit rate schedule, effective 4 August 2026 and checked on 11 October 2026, lists a 444-day callable deposit rate of 6.50% per annum for deposits below ₹3 crore. The bank separately publishes an additional 0.50 percentage point for eligible resident senior citizens and 0.75 percentage point for eligible resident super-senior citizens on domestic term deposits up to ₹5 crore, making the corresponding 444-day callable rates 7.00% and 7.25% where the concession applies. This is a specified tenor in the bank’s regular term-deposit framework, not a separately guaranteed or tax-free scheme. A different non-callable column displays 6.80% for the 444-day tenor in the above-₹1-crore-to-below-₹3-crore slab, but the bank’s separate non-callable product page describes eligibility beginning at ₹3 crore; that inconsistency requires direct bank confirmation and the non-callable quote should not be presented as universally bookable. A callable deposit permits premature closure subject to the bank’s rate-adjustment and penalty rules. Union Bank’s published retail rule states a 1% reduction for qualifying deposits below ₹2 crore closed after at least seven days, measured against the lower of the contracted rate or the applicable rate for the actual run period. Eligible deposits are insured by DICGC up to ₹5 lakh in aggregate per depositor per bank in the same right and capacity, including principal and interest. Interest is taxable even without TDS. For Tax Year 2026-27, bank-interest TDS under section 393 of the Income-tax Act, 2025 ordinarily has ₹50,000 and ₹1,00,000 thresholds for other resident depositors and senior citizens respectively; eligible no-TDS declarations use Form 121, replacing Forms 15G and 15H.

Product Identification and Rate Verification

The bank describes its ordinary product as Fixed Deposit Receipt (FDR), while the rate card identifies individual tenors, including 444 days. Accordingly, this article analyses a 444-day callable Union Bank term deposit; it does not claim that the bank has launched a separately branded “444-Day Special FD”. The official rate card is explicitly effective from 4 August 2026 and was the latest rate schedule visible on the bank’s current page when reviewed on 11 October 2026. The deposit receipt and bank confirmation remain controlling for an actual booking.

444-Day Rate and Nearby Tenor Comparison

*Senior and super-senior figures above are arithmetic applications of the bank’s published 0.50/0.75 percentage-point domestic concessions to the listed base rates. The bank limits these concessions to eligible resident customers and its specified deposit conditions. These are rate disclosures, not a comparison or ranking of investment merit. The rate for a booking can differ if the bank revises its schedule or the depositor selects another amount, payout structure or product.

The Non-Callable 444-Day Quote Needs Separate Verification

Union Bank’s rate table includes a 6.80% non-callable quote for 444 days in a column headed “above ₹1 crore to below ₹3 crore”. However, its separate “Union Non Callable Term Deposits Scheme” page describes a minimum single deposit of ₹3 crore and says premature closure is unavailable except in specified circumstances. These two public disclosures are not fully aligned. A reader should not infer that a ₹1.5 crore non-callable booking at 6.80% is currently available without written clarification from the bank. The main analysis and headline rates here concern the callable product, for which this ambiguity does not arise.

Eligibility, Amount, Account Type and Documentation

A domestic FDR is opened under the bank’s prevailing customer eligibility, account-opening and know-your-customer rules. Resident individuals and other permitted entities may be eligible depending on constitution and mandate; NRO deposits have separate non-resident and tax rules. The published 444-day rate applies to the displayed deposit-amount slab, but the public pages reviewed do not state one universal minimum initial booking amount for every FDR variant. The bank should confirm the minimum booking amount, account-opening route, whether the deposit is callable and whether a senior concession is available before funds are transferred.

PAN, identity and address documents, account-holder mandate, beneficial-owner information for entities and source-of-funds evidence should be maintained as required by RBI KYC and bank policy. For joint deposits, the operation mandate—either or survivor, former or survivor, or another permitted instruction—affects how maturity proceeds are paid. The depositor should ensure the bank’s receipt correctly records principal, tenor, interest rate, maturity date, interest-payout choice, nomination and renewal instructions.

Interest Payment and Compounding: Do Not Confuse FDR with DRIC

Union Bank lists a Fixed Deposit Receipt separately from its Deposit Re-investment Certificate (DRIC), which explicitly offers quarterly compounding. A conventional FDR may be used for interest payouts under the chosen product conditions; a cumulative reinvestment product has different cash-flow and maturity mechanics. Consequently, a quoted 6.50% annual rate is not itself a promise of one specific effective yield or maturity value. The deposit advice should identify whether interest is paid periodically or accumulated and which day-count and compounding convention applies.

For illustration only, simple interest on ₹5,00,000 at 6.50% for 444 days using a 365-day denominator is ₹39,534 approximately (₹5,00,000 × 6.50% × 444/365), before tax. This is a transparent arithmetic illustration, not a bank maturity quotation. Actual payment may differ due to quarterly compounding, interest-payment dates, rounding, leap-year conventions or the selected deposit product. Interest accrued for tax purposes can also differ from cash received during a tax year.

Premature Withdrawal: Published 1% Adjustment and Exceptions

The bank’s Fixed Deposit Receipt page and term-deposit product listing state that, for retail term deposits below ₹2 crore opened or renewed under the applicable rule and closed after at least seven days, the interest payable is 1.00 percentage point less than the applicable rate on the opening date for the actual period the deposit remained with the bank, or 1.00 percentage point less than the contracted rate, whichever is lower. The bank also identifies exceptions for certain flexi, bank-induced and other named deposit categories. This rule should not be extrapolated to every bulk deposit or to a non-callable product.

For example, if a 444-day callable deposit is closed after 200 days, the bank does not simply pay 6.50% for 200 days. It determines the rate applicable to the actual 200-day period and applies the relevant contractual adjustment. The resulting interest may be lower than the original projected amount. Early closure can also require recalculation of interest already paid in a periodic-payout arrangement. Depositors should obtain the bank’s pre-closure quotation before authorising closure.

Renewal, Maturity, Nomination and Loan Against Deposit

Union Bank describes automatic renewal as available for its FDR product. The customer must distinguish a renewal of principal alone from renewal of principal plus interest, and should not assume the 444-day rate will remain unchanged when the original deposit matures. The prevailing renewal-date schedule applies unless the deposit terms provide otherwise. Unclaimed maturity proceeds and overdue-deposit treatment also require attention where instructions are missing or contact details are outdated.

The bank’s term-deposit page confirms nomination for bank deposits and states that up to four nominees can be appointed in the permitted simultaneous or successive manner, subject to current banking nomination rules. Nomination assists settlement but does not invariably resolve ultimate beneficial succession rights. Union Bank also confirms availability of loans against eligible FDRs. The loan/overdraft amount, margin, pricing, lien, tenure and repayment conditions are determined by the bank; borrowing creates a separate liability and should not be treated as interest-free access to the deposit.

DICGC Protection and Bank Regulatory Status

Union Bank is a bank subject to RBI prudential supervision; its ordinary eligible deposits fall within the Deposit Insurance and Credit Guarantee Corporation framework. DICGC’s official guide confirms that principal and accrued interest are insured together up to ₹5,00,000 for a depositor in the same right and same capacity at the same insured bank. Savings, current, recurring and fixed deposits across the bank’s branches are aggregated for that limit. A depositor with ₹4.90 lakh principal and ₹30,000 accrued interest does not receive ₹5.20 lakh of insurance in that capacity; the statutory maximum is ₹5 lakh.

TaxGuru has also reproduced the parliamentary explanation of protection available to bank fixed-deposit investors. The insurance ceiling is not per receipt, per branch or per nominee. Different banks and genuinely different ownership capacities are analysed separately under DICGC rules. A fixed deposit with a bank is not the same instrument as a rated NBFC corporate deposit, and the bank’s regulatory status should not be confused with a standalone credit rating of each FD receipt.

Tax on FD Interest for Tax Year 2026-27

For a resident individual holding an ordinary deposit, interest is generally chargeable under income from other sources, unless the facts justify business-income treatment. The Income-tax Act, 2025 applies from 1 April 2026 to Tax Year 2026-27. Income is not exempt merely because the bank did not deduct TDS or because the deposit is held for 444 days. Accrual versus receipt and interest already offered in an earlier year must be reconciled so that the same income is not taxed twice.

Section 393 TDS Thresholds and PAN

Section 393(1), Table Sl. No. 5(ii) of the 2025 Act covers specified bank-interest payments. The ₹50,000/₹1,00,000 figures are thresholds for deduction, not tax-free allowances; when withholding is triggered, the relevant statutory base must be considered. The bank may aggregate interest across branches for the same PAN. Failure to furnish a valid PAN can trigger higher withholding under the applicable provision. The customer should reconcile interest certificates and AIS/Form 26AS entries with the return, including TDS deducted on accrued interest.

Form 121 Replaces Forms 15G and 15H

For Tax Year 2026-27, an eligible resident uses Form No. 121 under section 393(6) read with Rule 211, not the legacy Form 15G or 15H. TaxGuru’s Form 121 transition explanation and detailed Form 121 guidance explain eligibility and the estimated nil-tax-liability condition.

The declaration must be factually accurate and supported by the person’s estimated total tax-year income. The Income Tax Department’s March 2026 notified form and CBDT’s 28 March 2026 notification prescribe PAN, reporting and UIN requirements. Form 121 prevents eligible withholding; it does not itself grant an exemption from tax or cancel interest income. A non-resident should not submit a resident declaration merely because the deposit is held at an Indian branch.

The bank also has payer-side compliance obligations, including declaration tracking and quarterly reporting, discussed in TaxGuru’s CBDT Form 121 UIN compliance update. A depositor should obtain acknowledgement of the declaration and verify whether it was accepted before the interest-credit date.

Senior-Citizen Issues, NRO/NRE and Practical Tax Checks

A higher bank rate and a higher tax-withholding threshold are independent benefits. Neither automatically makes senior-citizen FD interest exempt. The final liability depends on total taxable income, tax regime, rebate eligibility and other circumstances. An individual who turns 60 during the relevant period should check both the bank’s contractual senior eligibility date and the income-tax definition rather than assuming they are identical.

Union Bank’s published NRE rate schedule also lists 444 days at 6.50% callable, but NRE deposits have distinct FEMA, premature-closure and income-tax conditions. Its NRE page says no interest is payable on closure before one year and provides a specific penalty for eligible premature closure after one year. NRE interest exemption, where available, depends on the statutory conditions; NRO interest is ordinarily taxable in India and may attract non-resident withholding. The resident senior-citizen concession in the domestic rate schedule should not be applied automatically to an NRI deposit.

Operational Checklist for a 444-Day Deposit

• Verify the 4 August 2026 rate schedule is still live on the actual booking date.
• Select callable 444-day FDR explicitly; do not confuse it with the non-callable column.
• Confirm deposit amount, minimum, interest-payout mode and any compounding choice with the bank.
• Check resident senior/super-senior status and the bank’s applicable age cut-off.
• Record maturity date, renewal mandate, joint-account operation and nomination.
• Preserve PAN, tax residency, Form 121 acknowledgement if eligible and annual interest certificate.
• Calculate DICGC exposure across all Union Bank deposits in the same ownership capacity.
• For premature closure or a loan against FD, obtain the bank’s transaction-specific written quote.

Frequently Asked Questions

1. What is Union Bank’s 444-day callable FD rate?

The official domestic/NRO schedule effective 4 August 2026 lists 6.50% p.a. for the below-₹3-crore callable slab; confirm the booking-date rate.

2. What are the senior and super-senior rates?

Applying the bank’s published domestic increments gives 7.00% and 7.25% respectively for eligible resident customers.

3. Is the 6.80% non-callable rate definitely available for ₹1.5 crore?

The rate table and separate non-callable product page contain inconsistent slab descriptions; written bank confirmation is necessary.

4. Can the 444-day callable FD be broken early?

Yes, subject to the rate applicable for the actual period and the relevant premature-withdrawal adjustment.

5. Does DICGC insure every FD up to ₹5 lakh separately?

No. Eligible principal and interest are aggregated per depositor, per bank, in the same right and capacity.

6. Are Forms 15G and 15H used for Tax Year 2026-27?

The current no-TDS declaration is Form 121 under section 393(6), subject to eligibility.

7. Is interest tax-free below the TDS threshold?

No. Withholding and final income-tax liability are separate.

8. Can a depositor borrow against the FD?

Union Bank states loans against eligible FDRs are available; margin and pricing require a bank quotation.

Key Takeaways

• The analysed product is Union Bank’s ordinary callable FDR at the 444-day tenor, not a separate branded guarantee.
• Official rates effective 4 August 2026 are 6.50% general, with 0.50/0.75 percentage-point resident senior concessions where eligible.
• A published non-callable quote has a slab inconsistency across official pages; it is not assumed to be available.
• Premature closure changes the interest computation and can impose a 1% rate adjustment under the specified retail rule.
• DICGC insures eligible principal plus interest up to ₹5 lakh per depositor per bank in the same right and capacity.
• Tax Year 2026-27 interest is taxable; section 393 withholding and Form 121 declarations require independent compliance.

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Disclaimer: This article is solely for general educational and informational purposes and reflects the official Union Bank of India rate card effective 4 August 2026, its public FDR/non-callable product disclosures, DICGC guidance and Income-tax Act, 2025 materials reviewed on 11 October 2026. It is not an offer, recommendation, ranking, prediction or personalised deposit, tax, legal, accounting or investment advice. The non-callable 444-day rate slab requires direct confirmation because the bank’s public pages are not fully aligned; no entitlement to that product or rate is asserted. Interest rates, minimum amounts, booking eligibility, senior benefits, compounding, payout frequency, premature-closure charges, loans, renewals, taxation and declaration procedures may change or differ by customer and deposit. The illustrative interest computation is not a maturity quotation. Depositors must check the live bank rate card, signed deposit terms, RBI/DICGC rules and current tax law and obtain advice where needed. TaxGuru, its owners, editors, management, employees and contributors accept no responsibility or liability for any loss, interest shortfall, tax, penalty, damage or consequence arising from use of or reliance on this article.

Primary Sources Reviewed

• Union Bank of India, Domestic/NRO Term Deposit Rates, effective 4 August 2026 (official rate-of-interest page).
• Union Bank of India, Fixed Deposit Receipt (FDR) product and term-deposit product listing, checked 11 October 2026.
• Union Bank of India, Union Non Callable Term Deposits Scheme page; published threshold differs from rate-card slab.
• DICGC, A Guide to Deposit Insurance (current official FAQs).
• Income Tax Department, Income-tax Rules 2026 Form 121 and CBDT Notification No. 01/CPC(TDS)/2026 dated 28 March 2026.