Union Bank MIS Interest Rate 2026: Returns, Features & Benefits

Union Bank of India Monthly Income Scheme (MIS) is a fixed deposit scheme that gives regular monthly income through interest payouts. Minimum investment is ₹1,000 and there is no maximum limit. It is suitable for conservative investors and retirees. The interest rates are from 5.40% to 6.65% p.a. Senior citizens get an additional 0.05%, while super senior citizens earn 0.75% extra on their deposits.

What is the Union Bank of India MIS Scheme?

The Union Bank of India Monthly Income Scheme (MIS) is a term deposit scheme, wherein the interest amount is paid monthly on a regular basis instead of being paid at the time of maturity. Investors deposit a lump sum amount for a selected tenure and the interest earned is credited to their savings account monthly. This scheme is open to a large category of investors with a minimum investment requirement of ₹1,000 and can be invested in multiples of ₹100 thereof.

The MIS option, however, aims to provide a regular monthly income, unlike cumulative fixed deposits in which the interest is reinvested and paid along with the principal on maturity. This makes it suitable for retirees, pensioners, and homemakers, and for those looking for an additional income. New investors can also explore other investment plans for beginners based on their financial goals

Union Bank of India MIS Scheme Interest Rate

The Union Bank of India MIS scheme interest rate depends on the deposit tenure and prevailing bank policies. Below are the interest rates for multiple tenures for deposits below ₹3 crore:

*Union Bank of India MIS Scheme Rates w.e.f June 1, 2026.

Benefits of Investing in the Union Bank MIS Scheme

Some of the benefits of the Union Bank Monthly Income Scheme for investors are as follows:

1. Steady Monthly Income: Disburses income on a monthly basis for daily needs. Regular interest payouts can complement other passive income ideas for long-term financial stability.
2. Competitive Interest Rates: Offers attractive returns through the prevailing Union Bank MIS interest rate.
3. Low-Risk Investment Option: Suitable for conservative investors seeking stable returns with minimal risk.
4. Capital Protection: Safeguards the principal amount throughout the tenure and returns it upon maturity.
5. Ideal for Retirement Planning: Helps retirees and pensioners create a dependable source of passive income. Investors may also compare post office saving schemes for stable and government-backed returns.
6. Low Entry Requirement: You can invest as little as ₹1,000, with no upper limit.
7. Easy Banking Access: Deposits are controlled through bank branches, Internet banking, and cell banking sectors.
8. Additional Benefits for Senior Citizens: Eligible senior citizens can enjoy higher interest rates, helping maximise monthly income.

Union Bank Monthly Income Scheme Calculator: How Returns Are Calculated?

Union Bank monthly income scheme calculator is a tool provided to investors to estimate the monthly income that is expected to be received by the investors from an investment in a monthly income scheme they have made with Union Bank of India. There are three factors in the estimation of returns:

• Deposit amount
• Applicable interest rate
• Deposit tenure 

The formula generally used is:

Monthly Income = (Deposit × Annual Interest Rate) / 12

So, for a deposit of ₹5,00,000 at 6.50% p.a.:

Monthly Income = (₹5,00,000 × 6.50%) ÷ 12 = ₹2,708

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Note: The monthly income figures are indicative and calculated before tax deduction. The payouts shown are indicative and may differ from the actual payouts depending on the applicable interest rate, deposit tenure and tax treatment.

Eligibility Criteria and Documents Required

The applicants are to meet the eligibility criteria for investment in the Union Bank of India Monthly Income Scheme.

*Applicants may also be required to complete KYC formalities before opening an account. 

How to Apply for the Union Bank MIS Scheme?

The Union Bank monthly income scheme application can be made online or offline. It can be done by following a few simple steps.

Online Application Process

1. Access Union Bank Internet Banking or Mobile Banking.
2. Choose the option of Fixed Deposit or MIS deposit.
3. Enter the amount of the deposit and details of tenure.
4. Verify the suitable Union Bank MIS interest rate.
5. Verify nominee and payout account information.
6. Apply and get approved.

Offline Application Process

1. Visit the nearest Union Bank of India branch.
2. Request the MIS deposit application form.
3. Enter your personal and investment information.
4. Upload KYC documents and images.
5. Invest the amount (Minimum ₹1,000).
6. Receive account verification and deposit confirmation.

Both methods are easy to use and allow investors to start generating monthly income fast.

Tax Implications of the Union Bank of India Monthly Income Scheme

The Union Bank of India Monthly Income Scheme is completely taxable and should be included under the Income from Other Sources section while filing the Income Tax Return (ITR). All interest income is clubbed together with the other income and taxed as per the tax slab applicable to you. Understanding income tax saving strategies can help investors plan their post-tax returns more effectively

In accordance with Section 194A of the Income Tax Act, Union Bank can deduct the Tax Deducted at Source (TDS) on the interest amount received from the fixed deposits when the total interest credited in a financial year is more than the threshold limit. From FY 2026-27, the rate of TDS will be applicable for a total interest of more than ₹50,000 for non-senior citizens and ₹1,00,000 for senior citizens. Typically, TDS will be deducted at 10% with PAN and at a higher rate without PAN.

If the estimated tax liability of the investors is nil, then they may file the Form 15G (for those who are below 60 years) and Form 15H (for senior citizens) with the TDS Department, subject to the conditions mentioned in the Income Tax Act, for non-deduction of TDS.

It is important to note for investors that TDS is just a collection tool and not the actual tax liability. Though TDS is not deducted from the interest income, it is still taxable and needs to be reported in the ITR. Please note that deposits under MIS are not eligible for tax benefits under section 80C. Hence, it is better to consider post-tax returns while investing in MIS.

This scheme provides a secure method to generate a steady income stream and protect your capital. Union Bank of India MIS scheme senior citizens rates range from 5.90% to 7.00% p.a. The minimum investment of just ₹1,000 continues to be a practical investment option for those investors who are in search of steady monthly returns and financial security.