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If you’re searching for a simple, disciplined way to grow your savings, UBGB’s Gramin Lakhpati Recurring Deposit (RD) is built for exactly that. You set aside a small fixed amount every month, the bank compounds your interest quarterly, and at the end of your chosen term you receive a lump sum—clear, predictable, and stress-free. Below is a plain-English walkthrough of how the scheme works, who can join, and what to expect along the way.
Who can open this RD (Eligibility)
- Individuals or joint holders can open the account.
- Adults and minors are eligible. Minors aged 10 years and above can open/operate the account (subject to bank norms).
- You can align it with your family’s savings goals—education, weddings, a safety fund, or simply becoming a “lakhpati” by hitting ₹1,00,000+ at maturity.
Interest rates & extra benefits
- Base interest rate: 5% p.a. (general category).
- Additional interest on top of the applicable rate:
- Senior citizens: + 1.0%
- Staff, ex-staff, and widows/widowers of staff: + 1.0%
- Ex-staff who are also senior citizens: + 1.5%
Note: “Additional interest” is applied over the prevailing rate for the chosen period and as per the bank’s rules. Always check the rate applicable to your tenure on the day you open the RD.
Flexible tenures (Maturity periods)
Choose what fits your goal and cash flow:
- 12 months
- 24 months
- 36 months
- 48 months
- 60 months
Longer tenures typically help you accumulate a larger corpus with the same monthly installment, thanks to compounding.
Easy, consistent deposits (Deposit procedure)
You can pay your monthly installment via:
- Cash at branch
- Transfer from your account
- Standing instructions (auto-debit so you never miss a month)
This keeps your plan on track without manual effort.
Borrowing against your RD (Loan/OD/Advance)
Need liquidity mid-way without breaking your deposit?
- You can avail up to 90% of the deposit amount as a loan/overdraft/advance against the RD—handy for emergencies or short-term needs, while your deposit continues to grow.
Nomination facility
- Nomination is available for both single and joint accounts.
- It’s a simple but vital step to ensure your savings reach the intended person without hassles.
Premature closure
- If you must close the RD early, no penalty or deduction is charged as per the shared scheme details.
- You’ll receive interest applicable up to the date of closure, calculated per bank rules.
How interest is calculated
- UBGB compounds interest quarterly.
- In practice, you deposit a fixed sum every month, and at the end of each quarter, interest is added on the accumulated balance.
- Over time, this compounding effect helps your savings grow faster than simple interest.
What monthly amount makes you a “Lakhpati”?
To give you a feel for planning, here’s an illustrative guide showing the approximate monthly deposit needed to reach ₹1,00,000 at maturity under the general 5% p.a. rate with quarterly compounding. (Figures rounded to the nearest rupee and for guidance only.)
- 12 months: ~₹8,078 per month
- 24 months: ~₹3,939 per month
- 36 months: ~₹2,560 per month
- 48 months: ~₹1,871 per month
- 60 months: ~₹1,459 per month
If you qualify for additional interest (e.g., senior citizen), your required monthly deposit to reach ₹1 lakh could be slightly lower, or your maturity amount could be higher for the same installment.
Taxation (as per scheme note)
- As shared in the scheme details, no tax is applicable on the interest earned.
- Because tax rules can change and may vary by individual circumstances, it’s wise to confirm the current policy with UBGB and/or your tax advisor when you open the account.
Why this RD stands out
- Clarity: Fixed monthly deposits, known tenure, and quarterly compounding make outcomes predictable.
- Accessibility: Open individually or jointly; minors (10+) can participate—great for building a savings habit early.
- Liquidity when needed: Loan/OD up to 90% of your deposit lets you handle emergencies without dismantling your plan.
- No premature-closure penalty: Helpful if life throws a curveball.
- Nomination ready: Ensures your savings are secured for your loved ones.
Quick start checklist
- Pick your goal and tenure. Do you want a 1-year sprint or a steady 5-year plan to ₹1 lakh?
- Decide your monthly installment. Use the guide above or ask the branch to compute the exact figure for your target maturity.
- Choose your deposit method. Standing instructions are easiest—set and forget.
- Add a nominee. Finish this during account opening; it takes minutes.
- Track quarterly interest. Watching your corpus grow keeps you motivated.
- If needed, use the OD/loan facility. You can access up to 90% of your deposit without closing the RD.
Who is this ideal for?
- First-time savers who want a low-stress, disciplined plan.
- Families saving for education, weddings, or a contingency fund.
- Senior citizens seeking extra interest while keeping things simple.
- Salaried professionals who prefer automatic monthly savings.
- Anyone aiming to become a “lakhpati” methodically, without market volatility.
Key takeaways
- Eligibility: Individuals, joint holders, adults, and minors (10+).
- Interest: 5% p.a. (general) + extra benefits for senior citizens and staff categories.
- Tenures: 12/24/36/48/60 months.
- Liquidity: Loan/OD up to 90% of deposit.
- Premature closure: No penalty (as per scheme details).
- Interest calc: Quarterly compounding on monthly deposits.
- Taxation: Scheme note says no tax on interest; confirm current rules when you apply.
Bottom line: UBGB’s Gramin Lakhpati Recurring Deposit gives you a clean, reliable path to build a meaningful corpus—backed by fixed monthly habits, quarterly compounding, flexible tenure choices, and practical liquidity options. If you’re ready to grow your savings the steady way, this is a strong, no-nonsense option to consider.
Kritti Kumari is a banker and MBA graduate who writes about banking, finance, and customer-friendly services. She simplifies complex financial products into easy guides, helping readers understand Bihar Gramin Bank’s offerings and make smarter money decisions.