Punjab National Bank (PNB) is a government-owned financial institution, established in 1894 and headquartered in New Delhi. A PNB recurring deposit (RD) is a strategic choice for those looking to amass savings over time, with tenures ranging from 6 months to 10 years, classified into short-term, medium-term, and long-term options.

Eligibility Criteria for PNB RD Account

To open a PNB RD account, the following eligibility requirements should be met:

• Individuals aged 10 or older can initiate an RD account with proper age proof.
• Minors under 10 can have an RD account managed by a guardian.
• Municipalities, panchayats, and quasi-government entities may also open RD accounts.
• Hindu Undivided Families (HUFs), charitable trusts, and proprietorships are eligible too.

Documents Required

To open a Punjab National Bank RD account, submit any of the following documents:

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: Accessible via PNB internet banking with nomination features; the maturity amount is credited to the linked account.

PNB Recurring Deposit Scheme

Available for individuals aged 10+, minors with guardians, partnership firms, HUFs, clubs, associations, and government bodies. The minimum deposit starts at Rs. 100 and can be increased in multiples.

PNB Special Recurring Deposit Product

Designed for government, private institutions, or corporate bodies with a minimum of 10 employees or 75% of eligible employees.

PNB RD Premature Withdrawal Facility

A penalty of 1% applies for premature withdrawals or irregular deposits as per PNB's regulations.

Tax Exemptions on PNB RD

Interest income from RDs is taxable based on the individual's income slab rates, with a 10% TDS if annual interest exceeds INR 40,000 (INR 50,000 for seniors), provided PAN details are on file; otherwise, the TDS rate increases to 20%.

How to Open a PNB Recurring Deposit Account

Two methods to initiate a PNB RD:

1. Online (Net Banking): Current PNB clients can log in with their credentials to set up an e-RD.
2. Offline (Branch Visit): Non-PNB account holders must first open a bank account at a nearby branch, then proceed to set up an e-RD online.

How to Calculate PD Maturity Amount

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

• 'A' = Total amount at maturity
• 'P' = Principal
• 'r' = Annual interest rate
• 'n' = Number of compounding occurrences
• 't' = Tenure

For example, Mr. Atul starts an RD with a Rs 500 monthly deposit for 24 months at 6.5% interest. The total deposit is Rs 12,843 with Rs 843 as interest. PNB RD accounts offer competitive rates and are subject to tax benefits under the Income Tax Act of 1961, with a 10% TDS on interest over Rs. 10,000 annually, mitigated by submitting Form 15G or 15H.