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PNB calculates a recurring deposit’s return using the card rate for its tenure, not a separate RD rate table. For an RD whose monthly instalments are all paid on time, the usual estimate uses quarterly compounding and the Indian Banks’ Association formula; if instalments remain unpaid at maturity, PNB instead specifies interest on daily balances with half-yearly compounding. The current domestic rate card for deposits below ₹3 crore was revised effective 5 November 2026, so check the live PNB deposit-rate table before estimating a new account.
What rate does PNB use for a recurring deposit?
PNB says an RD earns the card rate applicable to its deposit tenure. In other words, you find the rate on PNB’s domestic term-deposit card for the relevant term and depositor category; there is no separate public RD rate card. The bank’s Recurring Deposit Scheme page says rates may change, while the current rate page identifies the card revised effective 5 November 2026.
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The rates below are for domestic resident rupee deposits below ₹3 crore, the scope relevant to this retail explanation. They are annual rates. A newly opened RD uses the applicable card rate when booked; PNB’s online calculator, by contrast, describes an estimate based on the present rate. A calculator estimate using today’s rate should not be mistaken for a promise that an existing deposit’s contracted rate will float as the rate card changes.
| Tenure band | Public | Senior citizen (60 to under 80) | Super senior citizen (80+) |
|---|---|---|---|
| 180–270 days | 6.00% | 6.50% | 6.75% |
| 271–302 days | 6.00% | 6.50% | 6.75% |
| 303 days | 5.95% | 6.45% | 6.70% |
| 304 days to under 1 year | 6.00% | 6.50% | 6.75% |
| 1 year | 6.25% | 6.75% | 7.00% |
| More than 1 year to 443 days | 6.30% | 6.80% | 7.05% |
| 444 days | 6.70% | 7.20% | 7.45% |
| 445–679 days | 6.30% | 6.80% | 7.05% |
| 680 days | 6.80% | 7.30% | 7.55% |
| 681 days to 2 years | 6.30% | 6.80% | 7.05% |
| More than 2 to 3 years | 6.30% | 6.80% | 7.05% |
| More than 3 years to 1,203 days | 6.35% | 6.85% | 7.10% |
| 1,204 days | 6.30% | 6.80% | 7.05% |
| 1,205 days to 5 years | 6.35% | 6.85% | 7.10% |
| More than 5 years to 10 years | 6.00% | 6.75% | 6.75% |
Rate table checked against PNB’s card effective 5 November 2026. The best public rate shown is 6.80% for 680 days; the best senior and super-senior rates are 7.30% and 7.55%, also for 680 days. The 444-day bucket is another special rate. These bumps make exact tenure matter: a nearby term can fall back to the regular band.
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PNB’s live rate-page footnotes specify an extra 50 basis points for senior citizens on domestic deposits up to five years and 75 basis points above five years; super seniors receive an extra 75 basis points across maturities. The displayed table follows those current footnotes. The RD scheme page retains older wording showing 80 basis points in some categories, which conflicts with the current rate table and its footnotes. For a current estimate, use the percentages on the live deposit-rate page. The additional senior rate does not apply to NRO deposits.
How is interest calculated on a PNB RD?
For a regular RD with each core monthly instalment paid on time, the standard estimate treats the deposits as a stream of monthly contributions earning quarterly-compounded interest. The IBA formula used by RD calculators is:
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteM = R × [(1 + i)n − 1] ÷ [1 − (1 + i)−1/3]
- M is the estimated maturity value, including principal and interest.
- R is the monthly instalment.
- r is the annual rate in percent, and i = r ÷ 400. For example, 7% means i = 0.0175.
- n is the number of quarters in the tenure: months divided by three.
Estimated interest is maturity value minus total deposits: M − (R × number of monthly instalments). The formula is an industry-standard calculator method, described by sources such as Groww’s PNB RD calculator and Angel One’s calculator. PNB’s public RD page does not print this algebraic formula or specify the core-banking system’s exact calculation engine for every fully regular account, so treat the result as an estimate rather than a bank-issued settlement figure.
Worked illustration: ₹2,000 a month for two years
Suppose the monthly deposit is ₹2,000, the tenure is 24 months (eight quarters), and the assumed annual rate is 7%. Then R = ₹2,000, n = 8, and i = 7/400 = 0.0175. Applying the formula gives an estimated maturity value of ₹51,640. Total deposits are ₹48,000, so the estimated interest is ₹3,640. This is a published textbook illustration of the formula—not PNB’s current two-year public rate, which is 6.30% on the card effective 5 November 2026.
The instalment-by-instalment way to understand the same result is to treat each payment as a small deposit. The first instalment earns for nearly the full term; the last earns for very little time. This explains why a monthly RD generally earns less than an FD funded with the same total amount on day one: the FD’s full lump sum compounds for the entire term, while RD instalments arrive gradually.
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Why do regular and overdue RDs use different methods?
PNB’s deposit policy says interest on term deposits is calculated at quarterly intervals, and its rate page says interest calculations use a 365-day year unless specified otherwise. The public RD scheme page gives a separate rule for pending instalments at maturity: interest is applied to daily balances with half-yearly compounding. The policy likewise says an RD that is not made regular by maturity earns simple interest on daily products, compounded half-yearly, and that the missed-instalment penalty is dispensed with in that situation.
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That distinction matters if a calculator assumes every monthly contribution arrived on schedule. A late or missing instalment changes the balance and the applicable calculation method; the regular-RD IBA estimate is not a reliable final payout estimate for an account with arrears. PNB’s policy also says a fraction of a month is treated as a full month for the delayed-instalment penalty, and an instalment is due on or before the month’s last working day.
For a standard regular RD, use quarterly compounding as the practical estimate. PNB’s policy describes quarterly calculation and credit on term deposits, while its RD scheme page explicitly describes half-yearly compounding for pending instalments. The public documents do not establish whether PNB’s core system uses precisely the closed-form formula or a daily-product implementation for every on-time RD. That is why a final bank maturity advice can differ slightly from a generic calculator, especially around day-count and rounding details.
What would a PNB RD calculator show?
A useful calculator needs at least three inputs: monthly deposit, tenure, and the applicable annual card rate. For an accurate estimate, it also needs to use the right depositor category and assume that instalments are paid on time. Enter a public, senior or super-senior rate only if the depositor meets the bank’s eligibility definition; do not use a promotional tenure’s rate for a different maturity period.
For context, Business Today’s published illustration at 6.50% p.a. with quarterly compounding gives the following approximate maturity values, rounded to the nearest rupee. These are not PNB quotes and 6.50% is not a universal current PNB rate; the table shows how the amount scales under a single assumed rate.
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| Monthly deposit | 1 year | 2 years | 3 years | 5 years |
|---|---|---|---|---|
| ₹500 | ₹6,214 | ₹12,843 | ₹19,912 | ₹35,495 |
| ₹1,000 | ₹12,429 | ₹25,685 | ₹39,824 | ₹70,991 |
| ₹2,000 | ₹24,857 | ₹51,370 | ₹79,649 | ₹1,41,982 |
| ₹5,000 | ₹62,143 | ₹1,28,425 | ₹1,99,122 | ₹3,54,954 |
| ₹10,000 | ₹1,24,286 | ₹2,56,851 | ₹3,98,244 | ₹7,09,908 |
For example, the ₹1,000 five-year illustration totals ₹60,000 in deposits and ₹70,991 at maturity, or ₹10,991 in estimated interest before tax. PNB’s maturity value is rounded to the nearest rupee and is subject to applicable TDS. The actual amount can differ if the booked rate, payment dates, missed instalments, tax deductions or bank rounding differ from the assumptions.
What happens if an instalment is late or missed?
PNB allows delayed instalments to be deposited before maturity, subject to a penalty of ₹1 per ₹100 per month. Because even a fraction of a month counts as a full month, a short delay may still attract a monthly penalty. The bank’s policy identifies the last working day of each calendar month as the due date for that month’s instalment.
If pending contributions are still unpaid at maturity, PNB says it applies interest to daily balances with half-yearly compounding. Its policy states that the non-deposit penalty is dispensed with when the account is not made regular by maturity, and interest is paid on daily products compounded half-yearly. Do not combine that overdue-account rule with the regular quarterly-compounding estimate: the balance history and method are different.
When does the RD mature, and what if I close it early?
PNB’s policy says maturity is 30 days (one month) after the last instalment or at the end of the contracted period, whichever is later. This rule also applies when the last instalment was paid late with the required penalty. If the payment date falls on a Sunday or bank holiday, the bank pays on the next working day. For a regular RD, maturity payment is available at par at CBS branches, without inter-sol charges; premature payment is handled only at the base branch.
PNB’s policy generally applies a 1% penal-interest reduction on premature closure. The payable rate is the card rate applicable to the amount and the period the deposit actually remained with the bank, minus 1%—not necessarily the original contracted rate. The policy exempts staff members, senior citizens (except certain deposits accepted at differential staff rates), and cases where the depositor dies before maturity from that 1% penalty. If an account with arrears is closed early after instalments were regularised and defaults then occurred, the policy specifies simple interest on daily products compounded half-yearly and dispenses with the missed-instalment penalty.
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PNB’s minimum term-deposit period for interest is currently seven days, but an RD cannot be opened for less than six months. That seven-day floor is therefore not a normal tenure choice for a new RD; it may matter only if an account is broken soon after opening. Check the bank’s applicable account terms before requesting an early closure.
How much can I deposit, and how do I open an RD?
PNB’s public scheme allows monthly instalments from ₹100, in multiples of ₹1, up to ₹25 lakh per customer per month. The tenure range is six to 120 months in whole-month increments. A standing instruction from a savings or current account can automate payments; PNB’s deposit policy says such transfers are free of charge. The scheme also lists a loan facility against the RD balance and nomination.
Existing customers can open an RD through PNB Internet Banking or the PNB ONE app by going to Deposits → Open Recurring Deposit, then selecting the monthly amount, tenure and account for auto-debit. The e-RD option is for internet-banking users, and the maturity amount is credited to the funding account according to the product information summarized by Paisabazaar. Confirm the live rate and account-specific terms with PNB before setting the instruction.
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How is PNB RD interest taxed?
RD interest is taxable as income from other sources and is taxed at the depositor’s applicable slab rate. RD contributions do not qualify for Section 80C deduction. PNB says it must deduct TDS when interest paid or payable across all term deposits held by a person exceeds the threshold specified under the Income-tax Act; the bank issues a TDS certificate for deductions. The RD page itself says TDS applies as per rules and that maturity is subject to applicable TDS.
Published secondary explanations in the source material disagree about the rupee threshold, so this article does not quote a single threshold as current law. The relevant test is not just the interest from one RD: PNB’s policy refers to interest on all the customer’s term deposits with the bank. TDS can be deducted as interest accrues during financial years even when the RD pays out only at maturity. If eligible for exemption from TDS, the depositor can submit the prescribed declaration at the beginning of each financial year; verify the correct form and current threshold under the applicable tax rules.
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Which calculation mistakes should you avoid?
- Do not use a lump-sum FD formula for the total RD deposits. A formula such as A = P(1 + R/N)NT assumes a principal invested from the start. An RD consists of separate monthly payments, each invested for a different period. Use an RD formula or calculate each instalment’s growth and sum the results.
- Do not mistake an illustration for PNB’s current card. The ₹51,640 example assumes 7%; it is not the current public two-year PNB rate. Always check the current rate card and the tenure bucket that applies.
- Do not apply the on-time estimate to a defaulted account. PNB sets a daily-balance, half-yearly method for arrears remaining at maturity.
- Do not treat a calculator’s current-rate result as a guaranteed maturity quote. The actual contract, payment history, tax deduction and rounding determine the payout.
In short, a regular PNB RD’s estimate depends on the monthly contribution, exact tenor, eligible card rate and quarterly compounding. Late or unpaid instalments change both the calculation and the payout rules, so the bank’s account-level maturity advice is the definitive figure.
Frequently Asked Questions
Can I take a loan against my PNB recurring deposit?
PNB’s RD scheme and deposit policy list a loan facility against the RD balance. The public product information cited here does not set out a loan-to-deposit percentage or borrowing rate, so ask the bank for the amount and terms applicable to your account.
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PNB lists individuals, including joint account holders and minors, as well as HUFs, firms, companies, trusts, societies, clubs and government or quasi-government bodies among eligible customers. The bank also lists arrangements for illiterate and visually challenged persons; branch assistance may be needed for account opening.
Does PNB pay RD maturity proceeds if the due date is a bank holiday?
PNB’s deposit policy says payment is made on the next working day when the maturity date is a Sunday or bank holiday. It also provides for interest on the maturity value for an intervening non-business working day for recurring and reinvestment deposits.
