Punjab Gramin Bank RD Interest Rates
Bank RDs are offered by public sector banks, private sector banks, co-operative banks, foreign banks and regional rural banks. You are required to invest in regular installments (usually monthly) which are pre-decided by you. Multiple tenures having different interest rates are there with the banks which you can opt for according to your need. Interest rates are calculated quarterly not annually and the maturity amount is taxable.
Premature withdrawals, In recurring deposit partial withdrawals are not allowed, you can withdraw entire amount anytime but after charging a certain penalty, banks generally charge 1% as penalty.
Punjab Gramin Bank Recurring Deposit
Punjab Gramin Bank offers you an opportunity to build up capital through regular monthly deposits of fixed sum over a period of time. It offers you various options of RD with period of deposit of minimum 12 months to maximum 120 months. There is no cap on maximum deposit amount of an RD. You need to give instructions for disposal of maturity proceeds at the time of opening of your RD account. Loans or OD facility of up to 90% of deposited amount is available. Rate of interest on RD is same as applicable to term deposits. The rate applicable to all Senior Citizens of age 60 years and above will be 0.50% above the applicable rate of general customers.
Investing in Punjab Gramin Bank is a great option for those who have fewer earnings. The benefit in RDs is that you get the same interest rate during the whole RD tenure, even if the future RD rates are lower.
Tax Implication on Recurring Deposit (RD)
Taxability of Interest Earned
Interest earned is taxable based on account holder’s tax bracket and therefore, he/ she is liable to pay tax on interest earned. Interest earned is taxable under the head “Income from Other Sources”.
Applicability of TDS
No TDS will be made on total interest earned upto Rs. 10,000. Whenever total interest earned exceeds Rs 10,000 in a financial year, 10% TDS is made. You are free to claim for refund of any extra TDS made. Earlier, there was no TDS on RD but with effect from 1st June 2015, the applicability of TDS on RD has been made under Section 194A.
More Rate of TDS
In absence of a valid PAN or if you fail to provide the PAN information to the bank/ post office, TDS at the rate of 20% is made.
Avoiding TDS
In case, the RD account holder does not have a taxable income, he/ she can submit Form 15G/ Form 15H to the bank/ post office where RD account is opened so that TDS can be avoided. Form 15G is used for people who are under 60 years of age while Form 15H is just similar to Form 15G, but it can only be used for people who are 60 years and above (senior citizens).
Punjab Gramin Bank Recurring Interest Rates (as on 30 Mar 2021)
| Maturity Period | Interest Rate (p.a.) |
|---|---|
| Year 1 | 5.80% |
| Year 2 | 5.80% |
| Year 3 | 5.70% |
| Year 4 | 5.70% |
| Year 5 | 5.70% |
Disclaimer: The Recurring Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your FD. Source: Bank Websites
Other Banks Recurring Interest Rates List
| Bank Name | 1 Year (p.a.) | 5 Years (p.a.) |
|---|---|---|
| North East Small Finance Bank | 7.50% | 6.50% |
| Idfc Bank | 7.25% | 7.25% |
| Utkarsh Small Finance Bank | 7.25% | 7.25% |
| Suryoday Small Finance Bank | 7.25% | 7.25% |
| Equitas Small Finance Bank | 7.10% | 6.75% |
| Rbl Bank | 7.00% | 6.65% |
| Indusind Bank | 7.00% | 6.65% |
| Esaf Small Finance Bank | 7.00% | 6.00% |
| Fincare Small Finance Bank Ltd | 6.95% | % |
| Allahabad Bank | 6.75% | 6.50% |
| Yes Bank | 6.75% | 6.75% |
| The Nainital Bank | 6.70% | 6.90% |
| Dcb Bank | 6.50% | 6.95% |
| Capital Small Finance Bank | 6.50% | 6.25% |
| United Bank Of India | 6.50% | 6.00% |
| Ujjivan Small Finance Bank | 6.50% | 5.55% |
| Standard Chartered Bank | 6.30% | % |
| Laxmi Vilas Bank | 6.00% | 6.00% |
| Tamilnad Mercantile Bank | 5.90% | 5.75% |
| Bandhan Bank | 5.75% | 5.75% |
| Punjab And Sind Bank | 5.55% | 5.55% |
| City Union Bank | 5.50% | 5.25% |
| Karur Vysya Bank | 5.50% | 5.65% |
| Karnataka Bank | 5.50% | 5.70% |
| Au Small Finance Bank | 5.50% | 6.50% |
| South Indian Bank | 5.50% | 5.60% |
| Federal Bank | 5.45% | 5.60% |
| Andhra Bank | 5.40% | 5.45% |
| Canara Bank | 5.40% | 5.30% |
| Corporation Bank | 5.40% | 5.45% |
Features of Recurring Deposit
The most notable features of RDs are as follows:
Recurring Deposit Formula
Interest on RD is calculated quarterly by most banks. Compound interest is more beneficial to the depositor because he earns interest on the interest earned on the principal amount. The following formula gives the total amount received on maturity:
M = R[(1+i)^n-1]/(1-(1+i)^(-1/3) )Where,
M = Maturity Value
R = Monthly Installment
n = Number of quarters
I = Rate of interest/400
ILLUSTRATION: Suppose you want to buy a motorcycle a year from now and want to save money for it while earning interest over it. So you start by opening a RD account, depositing ₹ 5,000 per month for a year. Interest rate range from 2.50% to 8.50%. Let’s assume you get the highest RD rate of 8.50% on your deposits, compounded quarterly.
M= Maturity amount
R= in our case, it is ₹ 5,000
i = 8.50/400
n= compounding frequency (since it is quarterly, it will be 4)
Using the above formula and values, we solve for M and get ₹ 62,815
So, you will receive amount of ₹ 62,815 after the maturity of the deposit after one year and the interest earned on the deposit is ₹ 2,815
Punjab Gramin Bank Recurring Deposit Calculator
In Punjab Gramin Bank RD account, a pre-specified amount is deposited at periodic intervals on a regular basis and its term is available from minimum of 6 months to a maximum of 10 years with monthly instalments of 12, 24, 36, 48, 60, 72, 84, 96, 108 and 120 months.
Following RD calculator facilitates for you to easily calculate the amount of interest earned as well as the maturity amount. Please note that the output of this calculator will give you a tentative idea of the maturity values and only your bank can tell you the exact amount that you will earn.
Punjab Gramin Bank RD Interest Rate Calculator helps computing interest earned on an RD on the basis of following components:
(1) Monthly Amount
You need to enter an amount which you will invest monthly. It is also called monthly instalment. Suppose you want to invest Rs 2000 each month then you will enter Rs 2000 in the given space.
(2) Duration
It is the RD duration/ tenure/ term for which you have registered your RD. It is to be specified in months. It ranges from 6 months to 120 months.
(3) Interest Rate
It is the rate of interest which will be provided by the bank on the RD. It depends on duration of your RD. It varies from bank to bank.
Output of RD Interest Rate Calculator
After you enter all the components mentioned above (Monthly Amount, Duration and Interest Rate) in the space provided and press calculate button, the output will show following results:
Deposit Amount
It will show total amount deposited by you in RD during its full tenure.
Maturity Amount
It will show the maturity value of your RD after its full tenure. It depends upon deposited amount, tenure of RD and rate of interest thereon.
Interest Earned
It shows total interest earned on your RD. It is the difference between Maturity Value and Deposit Amount.
Premature Withdrawal or Breaking of RD
The amount can only be withdrawn on maturity. In case of emergency you can break your RD before maturity by closing your account. The bank may deduct 1 or 2 percent as interest penalty from the interest accrued on your RD amount for the period for which the amount was with the bank.
The minimum lock in period is 3 months and if the depositor request a premature withdrawal before that, he earns zero interest and only the principal amount will be refunded to him. Apart from cancelled interest, any incentives offered are also withdrawn.
Partial Withdrawal of RD
Partial withdrawal is not allowed. However, some banks offer the facility to obtain loan or overdraft by keeping your deposit as collateral. On the other hand, premature withdrawals are allowed by post offices if you have an RD account with them for at least a year. The withdrawn amount is considered a loan, which has to be paid in lump sum.
Tax Exemption on Recurring Deposits
Earlier no tax was deducted on recurring deposit. With effect to 1st June, 2015, these deposits are subject to TDS (tax deducted at source) as per the income tax laws. However, no TDS would be deducted if the interest income earned does not exceed ₹ 10,000 in a financial year.
Tax is to be paid as per applicable slabs at the time of filing income tax return. If you have submitted Form 15G (in case of normal citizens) and 15H (in case of senior citizen) in the bank, your TDS will not be deducted (in case your total taxable income doesn’t come under tax slab).
RD for Senior Citizens
Senior citizens can also open a RD account. The rate of interest they earn is slightly higher than the regular deposits available to other citizens. Generally banks offer 0.25 percent to 0.75 percent more interest than normal RDs, compounded annually and the tenure and amount is fixed by banks. Indian residents and NRIs both can open this account.
Your age must be above 60 years on the date of opening the RD account.
Loan against Recurring Deposit
You can avail loan against your RD account by using your deposited amount as collateral. Generally banks provide 75 to 90 percent of the deposited amount as loan. However, the loan to value varies from bank to bank. For example- SBI gives 90% of the deposited amount as loan whereas Bank of Baroda gives 95% of deposited amount as loan. Loan against RD is a quick and instant loan that can be availed with nominal interest rates of 1-2% higher than that offered on your account.
Post office Recurring Deposit Scheme (PORD)
PORD is the systematic saving plan that offers guaranteed returns. The objective of PORD account is to provide assured return, compounded quarterly or monthly over a period of 60 months. It doesn’t offer any tax incentives, but it is preferred by small savers due to government backing.
Credit Rating: It does not require any commercial rating because it is offered by Government of India.
Exit Option: Penalty is charged in case of premature closing of account.
Other Risks: There is no risk associated with this investment and it is completely risk-free.
Where to Open an Account: You can open the account in any post office.
Post Office Monthly Income Scheme
Following documents are needed to open PORD Account:
Post Office Recurring Deposit
Flexi RD
Many banks offer Flexi deposits that are a variant of RD in which a depositor can invest a varying or flexible amount of money in his account every month. In this kind of RDs, the depositor has to choose the core amount and the flexible installment amounts at the time of opening the account. This amount has to be in multiples of the core amount. For example, if the core amount is chosen to be ₹ 200, the periodic deposits will also be either of ₹ 200 or in multiples of that.
This account gives the flexibility and convenience to the depositor allowing him to deposit an amount he can comfortably spare every month. Interest payable is fixed for the core amount, and interest on the multiples is calculated based on the duration for which the additional funds have been deposited into the accounts.
Difference between Fixed Deposit and Recurring Deposit
| Fixed Deposit | Recurring Deposit |
|---|---|
| The purpose of an FD is to enable investors to mobilize idle savings and earn a higher rate of interest than regular savings bank accounts | The purpose of an RD is to inculcate a regular habit of savings among the public |
| The deposit is made in lump sum for opening an FD | RD account can be opened with a small sum in which regular deposits of fixed amount can be made every month |
| Tenure ranges between 90 days to 10 years in most of the banks | The tenure of RD ranges from 6 months to 10 years |
| Tax exemption under the Section 80C of Income Tax Act 1961 is applicable | No tax exemption is allowed on RDs. These are subject to TDS (tax deducted at source) for an interest income exceeding ₹ 10,000. |
| Premature withdrawal is allowed with a penalty | Premature withdrawal is allowed in RD with penalty and without penalty in some banks |
| Interest on fixed deposit can be paid quarterly, half yearly, annually or on maturity | The interest on RD is in most cases compounded quarterly |
Recurring Deposit Products
All banks offer RDs at attractive rates and tenures and a few of them offer products which are aimed at serving special needs. These are tabulated below.
| Bank Name | Product Name | Deposit Amount | Tenure |
|---|---|---|---|
| Private Bank | Croma delightful deposits MakeMyTrip Holiday Savings Plan Tanishq Jewelry Plan Thomas Cook Holiday Savings Account |
Rs. 5,000 or Rs. 10,000 Rs. 5,000 Rs. 5,000 Rs. 5,000 or Rs. 10,000 |
6 months or 12 month 6 months or 12 month 12 months 12 months |
| SBI | Holiday Saving RD | ₹ 100 | N.A |
| Bank of Baroda | Samriddhi Quarterly Recurring Deposit Samriddhi Half Yearly Recurring Deposit Yatha Shakti Jama Yojna |
Rs. 500 Rs. 1,000 N.A |
36 months 36 months 10 months |
| Central Bank of India | Cent Swa Shakti Flexi Cent Lakhpati Cent Millionaire |
₹ 100 ₹ 100 ₹ 100 |
6 months 12 months 12 months |
News Snippets
State Bank of India, the country’s largest lender, on Monday, reduced its interest rate on home loans up to ₹ 75 lakh to 6.70 per cent, its lowest interest rate on home loans on record. The interest rate on home loans between ₹ 75 lakh – ₹ 5 crores have been reduced to 6.75 per cent, SBI said in a press release. Meanwhile, the bank is also offering a 100 per cent waiver on loan processing fees. Women borrowers will get an additional concession of 5 basis points on the interest rate, SBI added.
“The country’s largest lender, State Bank of India (SBI) has sweetened the offers on Home Loans and now offers interest concession of upto 70 bps with interest rates starting from 6.70 per cent onwards (limited period offer ending on 31st March ’21). The lender is also giving a 100 per cent waiver on processing fees. The interest concessions are based on the loan amount and CIBIL score of the borrower. SBI believes that it is important to extend better rates to customers who maintain good repayment history,” SBI said in a press release.
FAQs
✅ What is the eligibility for opening an RD account?
Indian residents and HUF (Hindu Undivided Families) can open RD account. NRIs can also open the RD account through NRO and NRE accounts. Banks provide this scheme for minors as well, under the guardianship of parents to supervise their finances.
✅ What is the common tenure/duration of Recurring Deposits?
RD can be opened for minimum 6 months which can further be increased in multiples of 3 months that can go up to maximum tenure of 10 years. However, minimum tenure can be different for different banks. For example- minimum tenure for RD in SBI is 12 months whereas 6 months in Private Bank.
✅ What exactly happens on maturity of an RD account?
On maturity of your RD account, you can ask the bank to transfer the principal amount and the accumulated interest component directly into your linked savings account. You can also invest your amount in fixed deposits after maturity.
✅ What is the nomination facility in terms of an RD account?
A nomination facility is available in recurring deposits. Whether you open it in a single name or joint name, only one nominee per account is permissible. You should ensure that the nomination is followed as per RBI rules. You can change the nominee through declaration in appropriate form.