PNB RD (Recurring Deposit) Calculator

PNB or Punjab National Bank is the second-largest public sector bank in India which offers various investment tools to its customers. One of which is the PNB Recurring Deposit (RD), a term-deposit scheme where the investor can make monthly deposits of a fixed amount for longer periods. It is suitable for salaried employees who want to develop saving habits.

PNB RD Calculator is a self-help instrument that can assist you in estimating the maturity amount of the investment. The calculator assists the user in computing the amount of interest earned during the tenure for better financial planning. 

What is PNB Recurring Deposit?  

The PNB recurring deposit is an investment scheme by the Punjab National Bank which offers interest on small investments made by the depositor for a fixed tenure. Some key features include:

• The tenure for PNB RD deposits can be anywhere between 6 months to 120 months
  
• The amount accrued on investment will be paid on the maturity date or month after the last installment is deposited. Whichever is later
  
• Interest will be compounded half-yearly
  
• The provision to avail of a loan overdraft against the deposit is available.
  
• The depositor can also appoint a nominee on the deposits. 

How to Use an Online PNB RD Calculator?

The PNB RD calculator is an easy-to-use online tool with a straightforward interface. It can help the user to calculate the maturity value of the investment in a hassle-free manner. The user is just required to follow the steps mentioned below 

STEP 1: Visit the Bank calculator page on the official website of PNB

STEP 2: The user is required to enter the Monthly Deposit Amount they will be willing to make in the recurring deposit. The user is then required to mention the interest rate earned on the  investment. It is better to enter the current interest rate for better accuracy. Finally, the user must determine the Tenure of the investment in the deposit account and mention it.

After you enter the above mentioned details in the PNB RD calculator. The calculator will estimate the following amount almost immediately: 

• Total Deposited Amount: Total of all monthly deposits made in the tenure
• Maturity Value: The amount accrued on maturity
• Interest: The amount earned on the investment

STEP 3: Enter and compare multiple amounts on the calculator to align them with your financial goals. 

For a better understanding, let’s examine the following example:

Suppose you plan to invest Rs 20,000 per month in your recurring deposit account. The rate of interest and the tenure on the investment is 5.25% and ten years, respectively.

As soon as you enter the values in the calculator. You’ll be provided with the following estimates immediately:

Total Deposit Amount:  24,00,000

Maturity Value:  31,57,382 (Approx.)

Interest Amount: 7,57,382 (Approx.)

Therefore, the approximated return on the recurring deposit is INR 31,57,382. And the interest income earned on the investment is INR 7,57,382.

Benefits of Using a PNB RD Calculator

The PNB RD Calculator helps the user to determine the maturity value of the investment and also offers various benefits such as 

Comparability 

The user can enter multiple values on the calculator. It gives the user a platform to compare the investment returns and compute which amount aligns with the expected returns or financial objectives.  

Accessible

The PNB RD Calculator is easily accessible. The user just needs a laptop or a mobile phone with internet connectivity to derive the maturity value in a few clicks. 

Convenience

The PNB RD Calculator comes with a straightforward interface that even first-time users can understand. The user is just required to mention the value, and the calculator would derive the final amount instantly. 

Time-Saving 

The calculator saves the users lots of time as they don’t have to go through hefty calculations manually, which are also prone to inaccuracies and are time-consuming. The calculator gives the user an indicative maturity amount on the investment which can help them with their investment planning. 

PNB Recurring Deposit Interest Rate 

Find below the rate of interest offered by PNB Bank on the Recurring Deposits since 4th April 2022

Investment Term	Interest Rate (General)	Interest Rate (Senior Citizen)
180 Days to 270 Days	4.50%	5.00%
271 Days to 364 Days	4.50%	5.00%
One Year	5.10%	5.60%
Above 1 Year to 3 Years	5.10%	5.60%
Above 3 Years to 5 Years	5.25%	5.75%
Above 5 Years to 10 Years	5.25%	5.75%

*The rates listed above are subject to change as per the convenience of the bank.

Factors Influencing Recurring Deposits Returns  

The returns on the recurring deposits may vary owing to the following factors:  

Investment tenure

The time period of the investment parked in the deposit plays a major role in determining the maturity value. The tenure of the investment dictates the interest rate earned on the investment. 

Age

The interest rate earned on the investment varies in the case of general and senior citizens. The banks grant a comparatively higher rate of interest if the depositor is a senior citizen. Generally, senior citizens earn an additional interest of 0.50% to 0.75% per annum. 

Economic Climate 

The current economic situation also influences the returns on deposits. External factors like inflation determine the interest rates on the deposits. For example, the bank provides higher interest rates on fixed investments like recurring deposits when inflation is high. 

Repo Rate 

The rate at which the banks borrow from the Reserve Bank of India is known as the Repo Rate. The repo rate is directly proportional to the interest rate on the deposits. The interest rate on the deposits will also reduce in case there is a reduction in repo rates.

Formulae for Calculating Maturity Value on the PNB RD Calculator

The maturity amount on the investment in the recurring deposit can be calculated by using the following mathematical formula:

M = R{(1+i) (n-1)} / 1-(1+i) (-⅓)}

Where

• M is the Maturity Value
  
• R is the Monthly installment
  
• i is the rate of interest divided by 4
• n is the tenure of the investment (quarters)

It is to be noted that the compound interest on the PNB recurring deposit after the first quarter is concluded.

• Quarter 1:  April to June
• Quarter 2: July to September
• Quarter 3: October to December
• Quarter 4: January to March

To get a better understanding of the formulae. Let’s take an example to determine how the calculator works.

Suppose you make a monthly deposit of Rs 4,000 for a tenure of 2 years in your PNB recurring deposit account. The interest rate is 7% p.a.

So, the maturity value calculated on the RD would be

M = 4000 {(1 + 7/400) (8-1)} / 1 – (1 + 7/400) (-⅓) 

M = 1,03,279 

And the Interest earned = Rs 7279 

Types of Recurring Deposits Schemes Offered by PNB 

Find below the following RD schemes the bank offers to its investors:

PNB Recurring Deposit Scheme (E-RD) 

 

This RD account is exclusively for the net banking users. The E-RD depositors can avail the same benefits as a regular RD account holder like appointing a nominee. The maturity amount will be credited to the same account through which the deposits were made.

PNB Recurring Deposit Scheme

This RD deposit account can be established by anyone who is at age of 10 or above. There is also a provision for individuals under the age of 10 to open an account through a legal guardian. Not only individuals, partnership firms, associations, clubs, and Hindu undivided families are also eligible to open recurring deposit accounts. The minimum amount to open an account is as little as Rs 100 and in multiples thereof. 

PNB Special Recurring Deposit Product

In this scheme the account can be opened in the name of Government institutions, private institutions, and corporate bodies. However, the institution must employ a minimum of 10 employees or 75% of eligible employees whichever is lower.