Your Guide to PNB Recurring Deposits and Eligibility

Punjab National Bank (PNB) is a prominent state-owned bank, founded in 1894, based in New Delhi. Opting for a PNB recurring deposit (RD) enables systematic savings with duration options from 6 months to 10 years, classified as short, medium, and long-term tenures.

Eligibility Criteria for PNB RD Account

To initiate a PNB RD account, the following criteria must be satisfied:

• Individuals aged 10 or older can open an RD account with valid age verification.
• Minors below 10 years can have an RD managed by a guardian.
• Municipalities, panchayats, and quasi-government bodies are entitled to RD accounts.
• Entities like Hindu Undivided Families (HUFs), charitable trusts, and sole proprietorships qualify as well.

Documents Required

For setting up a Punjab National Bank RD account, these documents are required:

Identity proof

• Voter ID or Aadhaar card
• PAN card
• Government-issued ID
• Ration card
• Senior citizen ID

Address proof

• Passport
• Telephone/electricity bill
• Bank statement with cheque
• ID issued by the post office

Types of PNB Recurring Deposit Schemes

PNB E-Recurring Deposit: Available through PNB internet banking, includes nomination facilities, with maturity amount directly credited to the associated account.

PNB Recurring Deposit Scheme

Eligible for individuals aged 10+, minors with guardians, partnership firms, HUFs, clubs, associations, and government organizations. The starting deposit is Rs. 100, adjustable incrementally.

PNB Special Recurring Deposit Product

Targeted at government, private institutions, or corporate sectors with at least 10 employees or 75% of eligible staff.

PNB RD Premature Withdrawal Facility

A penalty of 1% is imposed for early withdrawals or inconsistent deposits according to PNB guidelines.

Tax Exemptions on PNB RD

Interest from RDs is taxable as per one's income slab rates, with 10% TDS applied if annual interest exceeds INR 40,000 (INR 50,000 for seniors), subject to PAN submission; otherwise, TDS is charged at 20%.

How to Open a PNB Recurring Deposit Account

Choose between these methods to start a PNB RD:

• Online (Net Banking): Current PNB users can login using credentials to set up an e-RD.
• Offline (Branch Visit): Non-PNB customers must first open a bank account at a nearby branch, then register an e-RD online.

How to Calculate PNB RD Maturity Amount

Apply the formula: A = P(1+r/n) ^ nt, where:

• 'A' = Total maturity amount
• 'P' = Principal
• 'r' = Annual interest rate
• 'n' = Compounding frequency
• 't' = Duration

For instance, Mr. Atul's RD with a Rs 500 monthly installment over 24 months at 6.5% interest results in a total deposit of Rs 12,843 with Rs 843 earned as interest. PNB RD accounts offer competitive rates and tax advantages under the Income Tax Act of 1961, with a 10% TDS on annual interest exceeding Rs. 10,000, reduced by submitting Form 15G or 15H.