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PNB RD Interest Rates 2022

PNB, short for Punjab National Bank is a banking and financial service bank owned by the Government of India. Founded in 1894, the bank has grown leaps and bounds and has its headquarter in New Delhi. A PNB recurring deposit is one of the best RDs available if you are thinking to make a significant corpus, in the long run. The tenure for a PNB RD account ranges from 6 months to 10 years. The tenures are further categorized as short-term, medium-term and long-term.

PNB RD Rates 2022

Tenure RD Rates for General Citizens RD Rates Senior Citizen
180 days – 270 days 4.40% 4.90%
271 days – 364 days 4.40% 4.90%
1 year 5.00% 5.60%
1 year 1 day – 3 years 5.00% 5.60%
3 years 1 day – 5 years 5.25% 5.75%
5 years 1 day – 10 years 5.25% 5.75%

Note: The above RD interest rates are for investments less than Rs. 1 Crore.

Features of PNB Recurring Deposit Scheme

  • The minimum amount needed to open a PNB RD account is as low as Rs. 100
  • The tenure ranges from 180 days to 10 years
  • Senior citizens can avail of an extra interest of 0.50% interest over regular interest rates
  • The maximum interest rate offered by the bank is for a tenure ranging from 3 years to 10 years. The rates are 5.25% for regular citizens and 5.75% for senior citizens
  • PNB offers a facility of loan against the deposit amount
  • TDS deductions depend on the income slab to which the applicant belongs
  • PNB also offers a nomination facility so that you can nominate somebody to collect the matured amount in case of the account holder’s demise

How to Apply for a PNB RD Account?

There are two methods to apply for an RD account at PNB

  1. Online (Net Banking)
  2. Offline (Visiting the Branch)

Online: This is for existing customers of Punjab National Bank; they can use your net banking username and password to log in to their online account and open an e-RD right away.

Offline: Those who are not PNB account holders, will have to open a PNB bank account first by visiting the nearest PNB branch. Once the account is active, one can open an e-RD by logging in to their net banking.

How to Calculate PNB RD Account Interest Rate Interest on Investment?

The formula used to calculate the total amount accumulated upon maturity is A = P(1+r/n) ^ nt.

Here:

  • ‘A’ is the final amount
  • ‘P’ is the principal
  • ‘r’ is the annual interest rate
  • ‘n’ is the number of times that interest has been compounded,
  • ‘t’ is the tenure

Suppose, Mr. Atul opens an RD account with a regular deposit of Rs 500 on 1.4.17 for 24 months or 2 years. The applicable PNB recurring deposit interest rate on the same is 6.5% as the total deposit amount would stand to Rs 12843 which is less than Rs 2 Crore. Interest on the same would be Rs 843 according to the formula.

Apart from getting the highest interest rates, RD in PNB is also eligible for tax benefits under the Income Tax Act of 1961. The sum invested in a recurring deposit account is included in your yearly income and a Tax Deducted at Source (TDS) of 10% is applicable on interest earned (provided, it is more than Rs. 10,000/year). For saving TDS on your PNB RD gains, you are required to file either Form 15G or 15H.

PNB RD Interest Rate Deciding Factor

The RD maturity amount you get is the sum of all the below-given parameters. Alternatively, one can also use the PNB RD Interest calculator to check the interest earned on their deposit.

Deposit Amount: The initial amount deposited by a customer in their account. The deposit amount for PNB RD starts from as low as Rs 100.

PNB RD Interest Rates: Punjab National Bank higher rate of interest on recurring deposits with longer tenure and lower interest rates for an account opened for a shorter period. The highest interest rate offered by the bank is 5.70% for the deposit amount.

Deposit Tenure: As mentioned in the previous point, low-interest rates are offered for short tenure RDs and vice-versa.

Eligibility Criteria to Open an RD account

To open a PNB RD account, you must fulfill these eligibility requirements:

  • Individuals, more than 10 years of age, can open an RD account by furnishing valid age proof. 
  • Minors below 10 years of age are allowed to operate an RD account under their parental guardianship.
  • Even the municipalities, panchayats, and other quasi-government bodies also have access to RD in PNB.
  • HUFs, charitable trusts, proprietorships can also open recurring deposit accounts.

Documents Required 

To open a Punjab National Bank RD account, you are required to submit any of the following documents mentioned below –

[A] Identify proof 

– A voter ID card or Aadhaar card

– PAN card

– Government ID card

– Ration card

– A senior citizen ID card

[B] Address proof 

– Passport

– Telephone or electricity bill

– Bank account statements with a cheque

– Any certificate or ID card issued by the post office

Components of the PNB RD

  • Premature Withdrawal Rules on PNB RD

As per the bank rules, the bank levies a penalty of 1% if the deposited amount is withdrawn before the maturity period. The penalty is also applicable in case the deposits are irregular or discontinued.

  • Tax Benefits

PNB RDs are not eligible for tax breaks. The interest income earned from RDs is taxable according to the individual’s income tax slab rates. Furthermore, if the annual interest income reaches INR 40,000, PNB deducts a 10% TDS (INR 50,000 for senior citizens). The 10% TDS rate is only applied when PAN data are given; otherwise, the bank reduces TDS to 20%.

  • Loan

PNB allows investors to borrow against their recurring deposits. This will assist them in meeting their liquidity needs. Furthermore, it eliminates the need to apply for a new loan.

Types of Recurring Deposit Offered by PNB

PNB Recurring Deposit (E-RD): This RD is available to PNB internet banking users only. This e-RD account has benefits like nomination like that of a regular RD account. Once it is matured, the amount is credited to the same account through which the term deposit was made.

PNB Recurring Deposit Scheme: This RD account can be opened by any individual who has attained 10 years of age or above. However, applicants below 10 years of age can also open a PNB recurring deposit scheme under the supervision of a guardian. Not only individuals but partnership firms, Hindu Undivided Families (HUF), clubs, associations, and other government bodies can also open his RD account. A PNB recurring deposit account can be opened with an amount as low as Rs. 100 and in multiple

PNB Special Recurring Deposit Product: Any government, private institution, or corporate body can open a PNB Special Recurring Deposit account. Any institution having a minimum of 10 employees or 75% of eligible employees (whichever is lower) are eligible to participate in this scheme.

FAQs

Q1. What is the eligibility to open a PNB RD account?

Any individual who is an Indian resident and HUF (Hindu Undivided Families). Moreover, NRIs can also open an RD account through NRO and NRE accounts. Bank also provides an RD scheme for minors (less than 10 years of age) under the guardianship of parents to monitor their finances.

Q2. What are the documents required for PNB Recurring Deposit Scheme?

Any valid identity proof and address proof will suffice along with passport size photographs of the applicant and duly filled application PNB RD account.

Q3. Does PNB allow partial withdrawal of RD accounts?

No, the bank doesn’t allow partial withdrawal of recurring deposits.

Q4. Is it mandatory to set up standing instructions on RD?

You will be asked to make the payment online in case you are opening an e-RD account. However, once the account is opened, the RD installments can be easily paid either online or at a branch instead of setting up standing instructions.

Q5. How to add nominees to the RD account?

Nominees can be added while opening an RD account online by providing the details of the nominee.

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