PNB Special Recurring Deposit – Features, Eligibility & Benefits

Features of PNB Special Recurring Deposit (RD)

Deposit Amount - Companies can start their PNB Special Recurring deposit accounts with a minimum deposit of Rs. 10 and can be increased in multiples of Rs. 1. The deposit amount has to be determined as per the PF deductions done for their employees.

Deposit Tenure - The PNB Special Recurring Deposit account can be opened with tenures ranging from 6 months to up to 120 months as per the requirement of the employer. Any renewal or extension of the deposit is subject to the bank’s prevailing policies and applicable interest rates at the time of renewal.

Nominations - The nomination facility will be extended as per Punjab National Bank guidelines.

Interest Payment - Interest paid for PNB Special Recurring Deposit accounts below Rs. 1 crore will be as per the CARD rate. For SF accounts, the interest will be credited to the customer's account on a half-yearly basis, during the months of March and September. The interest is calculated on a daily product basis and credited on a half-yearly basis in March and September.

Premature Closure or Withdrawal - Premature withdrawals cannot be done for PNB Special Recurring Deposit accounts without getting permission from the employer.

Loans and Advances - Account holders might be sanctioned loans with prior sanction from the institution and as per L&A Circulars given by IRMD (Credit Policy Section).

Tax - TDS is applicable as per income tax rules, and the bank issues a TDS certificate for the tax deducted.

Additional Features & Benefits

Penalty clause 

No penalty is charged on missed instalments under the PNB Special Recurring Deposit Scheme. 

 Purpose of the Scheme

The PNB Special RD scheme is mainly designed for:

• Salary-linked savings
• Provident Fund (PF)-linked contributions
• Structured employee savings programs
• Institutional long-term financial planning

 Mode of Deposit

• Deposits are usually made through bulk credit by the employer.
• The contribution amount is deducted from employees’ salaries (if applicable).
• Standing instructions can be set up for automatic monthly deposits.

 Interest Calculation

• Interest is compounded quarterly.
• Interest rates applicable will be as per the prevailing RD rates at the time of opening.
• For deposits above ₹1 crore, negotiated rates may apply (subject to bank policy).

 Account Operation

• The account is generally operated under the instructions of the employer.
• Employees may not independently modify the deposit amount without employer approval.
• Closure or loan facility requires institutional consent.

 Loan Facility – Additional Details

• Loans may be granted against the balance in the RD account.
• Loan eligibility percentage is determined by bank policy.
• Employer’s written approval is mandatory before sanctioning the loan.

 Transfer & Portability

• If an employee leaves the institution, the employer may: Close the RD account and settle proceeds, or Convert it into a regular RD (subject to bank approval).
  • Close the RD account and settle proceeds, or
  • Convert it into a regular RD (subject to bank approval)

Maturity Proceeds

On maturity:

• The proceeds can be credited to the employee’s savings account, or
• Paid as per employer’s instructions.

Nomination & Legal Compliance

• Nomination facility is available as per Punjab National Bank guidelines.

The nomination can be made in favour of an individual as per banking rules and can be updated or cancelled by the depositor using prescribed forms. 

The account is operated under the instructions of the employer, and all transactions including nomination are subject to institutional approval. 

Accounts are governed by RBI regulations and bank-specific circulars. The scheme also complies with Know Your Customer (KYC) norms and other regulatory requirements applicable to institutional deposit schemes. 

The interest income earned is taxable as per applicable income tax laws, and TDS is deducted if it exceeds the prescribed limit. 

 Ideal For

This scheme is suitable for:

• Government departments
• Public Sector Undertakings (PSUs)
• Large private corporations
• Educational institutions
• Employee welfare schemes
• It is ideal for organizations looking to build disciplined saving habits among employees through salary or PF-linked deductions. 

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