PNB Tax Saver Fixed Deposit Scheme

PNB Tax Saver Fixed Deposit Details
Deposit Amount Up to Rs. 1.50 lakhs
Tenure Lock-in for 5 years
Tax Deduction Under Section 80C as per Income Tax Act

PNB Tax Saver Fixed Deposit Scheme helps you to avail tax deductions under Section 80C of the Income Tax Act, 1961. So, you can save taxes as well as earn returns on the investment. You can deposit up to Rs. 1.50 lakhs in this fixed deposit (FD). The lock-in period is for 5 years. You cannot make premature withdrawals. If you break the Punjab National Bank (PNB) FD before maturity, a penalty will apply. A nomination facility is available.

In this post, we will discuss Punjab National Bank Tax Saver Fixed Deposit eligibility criteria, features, interest rates, and FAQs.

Eligibility Criteria for PNB Tax Saver FD Scheme

  • Individuals, blind persons, illiterates, and joint account
  • Hindu Undivided Family (HUF)
  • The receipt of the joint holder deposit is issued jointly to an adult and minor or two adults.
  • It is payable to the survivor or either of the holders.
  • In this case, the income deduction under Section 80C of the IT Act is available to the primary deposit holder.

Features of PNB Tax Saver Fixed Deposit

Here are a few important features:

1) Deposit Amount

  • Rs. 100 is the minimum deposit for PNB Fixed Deposit. You can deposit in the multiples of Rs. 100 thereof
  • The maximum deposit per finance year is Rs. 1.50 lakhs
  • You have to submit a declaration according to the ANNEXURE-B of the Bank during account opening, and annexed with AOF.

2) Deposit Tenure

  • The minimum tenure of PNB FD should be 5 years or up to a maximum of 10 years
  • The Lock-in period is 5 years and you cannot encash the Fixed Deposit before expiry or in case of the depositor’s death

3) Premature Withdrawal/Part Withdrawal

You cannot make partial withdrawals or premature cancellations before the lock-in period of 5 years gets over. But in case of the depositor’s death before the maturity of the PNB Fixed Deposit, the legal heir/nominee will receive the premature payment without a levy of penalty, even before the expiry of the lock-in period.

4) Income Tax Deducted at Source

Interest on the PNB Tax Saver Fixed Deposit is liable for tax under the Income Tax Act. This is according to the annual receipt or accrual. It is also depending on the accounting method followed by the depositor.

5) Loan/Advance

You cannot take a loan on the PNB Tax Saver Fixed Deposit until the lock-in period of 5 years expires. After the expiry, you can avail of a loan as per the terms and conditions issued at that particular period.

6) Payment to Legal Heirs

If the PNB Fixed Deposit holder passes away and there is no nominee, then incumbents of the bank branch that issued the receipt will pay the sum due to the deceased, as the amount payable to the legal heir.

PNB Tax Saver FD Interest Rate

You need to select one of the below-given options before opening the Term Deposit Account:

  • Applicable Interest Rate

    Senior citizens will receive 0.50% additional interest. Staff members will receive 1% additional interest over and above the applicable rate, including that for the senior citizens. The payment of interest is as per the option selected by the depositor at the time of opening the deposit.

    For the general public, the rate is 5.30% for a deposit of 5 years or between 5 years and 10 years. The same for senior citizens is 5.80%. For staff members (general and senior citizens), the PNB FD interest rate is 6.30%.

  • Maturity Option (Re-Invested Interest)

    The interest is compounded quarterly. It is payable on maturity of the deposit. For the calculation purpose, the incomplete quarter is analysed at the end.

  • Income Option (Outflow of Interest)

    The interest on PNB Fixed Deposit is paid every month/quarter/half a year/year. The interest payment is quarterly is made at on simple interest rate. On the other hand, monthly interest is paid at a discounted value. The same is compounded quarterly in the case of yearly and half-yearly interest payments.

Frequently Asked Questions about PNB Tax Saver Fixed Deposit

Here are the FAQs for Punjab National Bank Tax Saver FD Scheme:

The bank offers a nomination facility for Term Deposits. In case the depositor passes away before the maturity of the FD, then the nominee is paid the amount standing to the credit to the deposit holder. This is without a succession certificate or conditions in the Will from the legal heir of the customer.

After you receive the verified lien, you can avail of a loan on the FD. The margin retained by the bank is as follows according to the maturity period:

  • 5% margin if the maturity period remaining is up to 2 years
  • 7.50%, 10.00%, and 12.00% margin if the expiry date leftover is above 2 years and up to 3 years, above 3 years and up to 4 years, above 4 years and up to 5 years, respectively
  • If the period remaining is above 5 years, then the margin is 20.00% at least
  • If the loan is against a third-party deposit, then the margin is at least 25.00%
  • For staff members/voluntarily or honourably retired/widow of staff a loan up to Rs. 3 lakhs will have a margin of 5.00%, and a loan over Rs. 3 lakhs will have a margin as applicable to the public

If you break the FD before maturity or want to make a partial withdrawal, then a penalty will apply as follows:

  • 1% penal interest is chargeable for all tenures. The payable interest will have a deduction of 1% or the contractual rate for the tenure when the deposit is liquidated, whichever is lower
  • If you close the PNB FD prematurely to invest in any other term deposit of the bank, and the re-investment is for a longer period than the remaining tenure of the original contract, then no penalty is levied
  • Premature withdrawal will not have any deduction if the depositor passes away before FD’s maturity. The amount is then payable to the nominee
  • The receipt for the Punjab National Bank Tax Saver FD will bear your name, PAN, address, and signature
  • It will also come with the rubber stamp reflecting the scheme name, your Permanent Account Number affixed on the existing AOF
  • If you are the depositor, then the receipt will be issued only to you at the bank branch
  • You will have to apply at the issuing bank branch with complete particulars such as the receipt date, PNB FD amount, account number, and circumstance under which the receipt was destroyed, robbed, defaced, lost, mutilated, for a duplicate receipt.
  • You will receive a duplicate receipt after confirmation from the incumbent in-charge. You will get receive an indemnity bond in a prescribed form with a surety or a bank guarantee after verification of the incident leading to the application of a duplicate receipt.
  • If the face value of the receipt or aggregate face value of the receipts is more than Rs. 500 or less, then you can get the duplicate receipt without any guarantee or surety.
  • You do not have to submit a guarantee, surety, or indemnity bond on the submission of defaced or mutilated receipt, which is identified as original and issued by the branch.
  • The duplicate copy will be treated as original. But it is only en-cashable at the branch that issued the receipt.