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Punjab National Bank recurring deposit scheme is an investment scheme that allows investors to invest in small amounts for a fixed tenure. The tenure of PNB RDs ranges between 6 months and ten years. The Punjab National Bank recurring deposit rate is around 5.5% – 5.8% for different tenures. PNB also offers additional interest rates for senior citizens on their RD investments. This article covers PNB RD and its interest rates in detail.

PNB RD Interest Rates 2021

Following are the interest rates of PNB RD schemes

The interest rates offered by Punjab National Bank RD are in the range of 5.50%-5.80% for a tenure of 6 months to 10 years for regular citizens. For the same tenure, the senior citizen RD rates range between 6% to 6.3%. PNB offers senior citizens additional interest of 0.5% on their FD investments. The interest is compounded half yearly. Returns from the bank recurring deposits can be estimated using the recurring deposit calculator. Also, the RD rates of PNB are higher than their savings account. PNB RD rates are dependent on the tenure of the investment, age of the investor, Reserve Bank of India policies and the current economic conditions in the country.

Interest on RDs is taxable as per the individual investor’s income tax slab rates. Investors have to show the interest income from PNB RD under the head ‘Income from Other Sources’ while filing their income tax returns. Moreover, Punjab National Bank deducts a TDS of 10% if the interest income exceeds INR 40,000 for regular citizens. The TDS threshold limit for senior citizens is INR 50,000. Also, the rate of TDS is 10% if the investor submits the PAN details. Else, the rate of TDS that the bank cuts is 20%.

TenureGeneral RD RatesSenior Citizen RD Rates
180 days to 270 days5.50%6.00%
271 days to 364 days5.60%6.10%
1 year to 10 years5.80%6.30%
Note: PNB RD rates are subject to change

Punjab National Bank Recurring Deposits

Following are the key features of PNB recurring deposits:

Tenure

The Punjab National Bank recurring deposit scheme tenure ranges between 6 months to 120 months, in multiples of 1 month.

Minimum and Maximum Deposit Amount

The minimum amount of investment in Punjab National Bank recurring deposit is INR 100. Also, there is no limit on maximum RD investment.

Punjab National Bank RD Interest Rates

The interest rates offered by Punjab National Bank RD are in the range of 5.50%-5.80%. Returns from the bank recurring deposits can be estimated using the recurring deposit calculator.

Preferential Interest Rates

Punjab National bank offers preferential interest rates for its senior citizen depositors. Senior citizens are eligible to get an additional 0.5% on their RD investments. The Punjab National Bank recurring deposit rate for them ranges between 6.00%-6.30%.

Tax and TDS

PNB RDs do not qualify for tax saving. The interest income that one earns from RDs is taxable as per the individual’s respective income tax slab rates. Moreover, PNB deducts a TDS of 10% if the interest income per annum exceeds INR 40,000 (INR 50,000 for senior citizens). The 10% TDS rate is applicable only when PAN details are submitted; else the bank cuts TDS at 20%.

One can determine whether PNB RD interest income is above or below the TDS threshold limit using the RD calculator. Also, investors can estimate their income tax liability using Scripbox’s Income Tax Calculator.

Premature withdrawal

PNB allows investors to prematurely withdraw their recurring deposits. However, the bank charges a penalty of 1% for prematurely withdrawing the amount.

Nomination Facility

Depositors can nominate beneficiaries for their Punjab National Bank RDs.

Convenience

Opening and managing the recurring deposit investments is easy and convenient through PNB bank’s online portal.

Loan against RD

PNB allows investors to take a loan against recurring deposits. This will help them in meeting their liquidity requirements. Furthermore, it avoids the hassle of applying for a fresh loan.

Investors can take loans such as loan against property (home loan), education loans, vehicle loans, etc., against PNB RD. Also, one can compute the loan EMI using the loan EMI calculator. Furthermore, the loan EMI calculator works as a personal loan EMI calculator. Moreover, it works as both a home loan calculator and car loan calculator. The investor can also use the EMI calculator for comparing different scenarios by changing the variables like the interest rate.

Requirements of PNB RD Scheme

Eligibility

The following individuals or groups of individuals are eligible to invest in PNB RDs.

  • Individuals, including minors who have attained the age of 10.
  • Minors below the age of 10 with the help of a guardian.
  • HUF
  • Sole Proprietorship firm
  • Partnership firm
  • Company
  • Association, Trust, educational institutions
  • Illiterate and blind people

Deposit and account

Investors can open a PNB recurring deposit account with an amount as low as INR 100. Also, there is no limit on the maximum amount of investment for a PNB RD. Investors should deposit the pending investments before maturity, and the bank will charge a penalty for the same ranging from INR 1 to INR 100 per month.

Documents required

Following are the documents required to open a PNB RD account.

  • Identity proof – Aadhar Card, Passport, PAN Card, and any government ID proof.
  • Address proof – Passport, Aadhar Card, utility bills, and bank statement with a cheque.

Withdrawal

PNB doesn’t allow partial withdrawals of the RD investments. However, it allows premature withdrawal at a penalty. The penalty that the bank charges are applicable as per the bank norms.

Tax

Investment in PNB RDs is not eligible for tax deduction under Section 80C of the Income Tax Act, 1961. Moreover, the interest income from PNB RD is taxable as per the individual investor’s income tax slab rates. Investors of PNB RD have to show their interest income under the head ‘Income from Other Sources’.

Also, the interest income is subject to TDS. The TDS rate is based on whether the investor has disclosed the PAN details to PNB or not.

If the investor submits the PAN Card details to Punjab National Bank, then the applicable TDS rate is10%, if the interest income exceeds INR 40,000 (for regular citizens). For senior citizens, the TDS threshold limit is INR 50,000.

If the investor doesn’t submit the PAN Card details to Punjab National Bank, then the applicable TDS rate is 20% if the interest income exceeds INR 40,000 (for regular citizens). For senior citizens, the TDS threshold limit is INR 50,000.

Nomination

PNB allows investors to nominate beneficiaries for their RD investments.

Types of Deposit Schemes

PNB offers the following recurring deposit schemes:

Recurring Deposits

  • Tenure: 6 months – 12 months (in multiples of 1 month)
  • Minimum Deposit Amount: INR 100, and no limit on the maximum amount.
  • Loan facility: Available
  • Tax Deducted at Source: Applicable
  • Nomination Facility: Available
  • Penalty for late deposits: Depositing pending instalments before the maturity date attracts a penalty of INR 1, for INR 100 per month.

PNB Special Recurring Deposit Product

  • Eligibility: The RD account can be open by all private and public institutions, PSUs, corporate bodies, etc. Also, the account has to be opened in the name of the institution A/C name of the employee. Furthermore, the institution has to open an account for at least ten employees of 75% of the eligible employees, whichever is lower.
  • Tenure: 6 months – 120 months (in multiples of 3 months)
  • Minimum Deposit Amount: INR 10 and in multiples of INR 1 thereafter.
  • Maximum Deposit Amount: No limit
  • Loan facility: Available
  • Tax Deducted at Source: Applicable, and the bank issues TDS certificate.
  • Nomination Facility: Available
  • Premature withdrawal: Premature withdrawals available, however, prior sanction or permission is required.

Is there a difference between the interest rates for Recurring Deposit and Fixed Deposit?

PNB offers varying interest rates for recurring deposits and fixed deposits. Following are PNB recurring deposit interest rates:

TenureGeneral RatesSenior Citizen Rates
180 days to 270 days5.50%6.00%
271 days to 364 days5.60%6.10%
1 year5.80%6.30%
1 yrs1 day to 3 yrs5.80%6.30%
3 yrs 1 day to 5 yrs5.80%6.30%
5 yrs 1 day to 10 yrs5.80%6.30%

Following are the PNB bank fixed deposit interest rates:

TenureFD Interest RatesSenior Citizen Fixed deposit Interest Rates
7 days to 14 days3.00%3.50%
15 days to 29 days3.00%3.50%
30 days to 45 days3.00%3.50%
46 days to 90 days3.25%3.75%
91 days to 179 days4.00%4.50%
180 days to 270 days4.40%4.90%
271 days to 364 days4.50%5.00%
1 year5.20%5.70%
1 yr 1 day to 2 yrs5.20%5.70%
2 yrs 1 day to 3 yrs5.20%5.70%
3 yrs 1 day to 5 yrs5.30%5.80%
5 yrs 1 day to 10 yrs5.30%5.80%

Conclusion

PNB RDs is an excellent investment alternative for investors who want to save small amounts regularly. Also, since PNB RDs guarantee returns, they are low risk investments. Hence investors looking for guaranteed returns can invest in PNB RDs. However, the interest income from PNB RD investments is subject to TDS and taxes. Therefore, investors have to consider taxes before investing in these investments.

Frequently Asked Questions

What are the limits on the minimum and maximum deposits?

The PNB RD account can be opened with as low as INR 100 per month. Furthermore, there is no limit on the maximum investment amount.

Can I open a recurring deposit account for a minor?

Yes, one can open a PNB RD account on behalf of a minor. Any minor who is above ten years can provide their ID proof and open the account. Also, any minor who is below or equal to 10 years of age can open the account with a guardian.

How to apply for PNB RD?

One can open a PNB RD account through offline and online modes. For online mode, one has to visit their website. And for offline mode, one has to visit the nearest branch of Punjab National Bank.
To be able to invest in PNB RD, one needs to have all valid documents. For identity proof, one needs to have an Aadhar Card, Passport, PAN Card, and any government ID proof. For address proof, one needs to have a Passport, Aadhar Card, utility bills, and bank statement with a cheque.

Is it possible to renew an RD account?

No, it is not possible to renew a PNB RD account.

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