Uttar Bihar Gramin Bank GRAMIN SWA-SHAKTI FLEXI RECURRING DEPOSIT Scheme

If you earn a monthly income and want a disciplined yet forgiving way to build wealth, the Uttar Bihar Gramin Bank (UBGB) GRAMIN SWA-SHAKTI FLEXI RECURRING DEPOSIT (Flexi RD) is designed for you. It keeps the core benefits of a recurring deposit—habit formation, compounding, and a clear maturity date—while adding the freedom to vary how much you put in each month. That flexibility makes it easier to stay on track even when your cash flow shifts due to festivals, school fees, or seasonal business cycles.

What makes this scheme different

Most RDs lock you into a fixed monthly installment. Miss it, and you could face penalties or lose momentum. The Flexi RD flips that script. You still commit to saving every month, but you can adjust the amount you deposit based on what’s realistic. If a month is tight, keep it small. If you receive a bonus or surplus cash, increase your deposit for that month—without opening a new account or changing the tenure. This blend of structure and freedom is what helps you stay consistent for the long haul.

Interest rates and compounding

The scheme follows UBGB’s prevailing deposit rates, which may change over time. Always confirm the current rate at your branch on the day you open or add funds. Your money benefits from quarterly compounding, meaning interest credited each quarter itself starts earning interest in the next quarter. Over multiple quarters, that compounding effect can make a meaningful difference to your maturity value compared with simple interest.

Core installment and monthly flexibility

You can deposit up to ₹1,00,000 per month (in multiples), with the freedom to flex the amount as life happens. Think of a core installment as your “default” monthly goal—say, ₹3,000 or ₹5,000—then top up or scale back in a given month as your budget allows, up to the ₹1 lakh cap. This keeps you committed while giving you breathing room during unplanned expenses. If you prefer total automation, you can set a standing instruction for your usual amount and make extra deposits manually when you have surplus cash.

Tenure choices that match your goals

You can choose any deposit period from 6 months to 120 months (10 years). Shorter tenures are great when you have near-term needs, like annual school fees or a planned trip. Longer tenures help compounding do more of the heavy lifting and can work well for building a contingency fund or saving for a future ceremony. Pick a maturity month that aligns with your expected expenses to avoid premature closures.

Easy ways to deposit

UBGB lets you fund your Flexi RD in cash at the branch or through free transfers from any UBGB branch. Ask about standing instructions so your core installment happens automatically; then add ad-hoc top-ups whenever you have extra income. Updating your passbook regularly gives you a clear picture of progress.

Taxation made simple

The scheme note states no TDS (Tax Deducted at Source) is applicable. That said, interest earned is generally taxable as per your income-tax slab, even if TDS isn’t deducted. Tax rules can change, and thresholds differ by individual profile. It’s wise to confirm the current tax treatment with your branch and, if needed, a tax advisor—especially if you are in a higher tax bracket or hold multiple deposits.

Nomination for peace of mind

A nomination facility is available for single accounts. This simple step ensures your savings pass smoothly to your chosen nominee and reduces paperwork for your family. The note specifies nomination is not available for minor accounts. If you plan to open the deposit in a minor’s name, discuss the best way to structure it with the branch and revisit nomination/authorization when the minor attains majority.

Loan against your deposit (liquidity without quitting)

Life doesn’t always wait for maturity. Instead of closing the deposit early, you can borrow against it—up to 90% of the deposit value (subject to bank approval and policy). This gives you short-term liquidity while your deposit continues to earn interest. It’s especially useful for bridging cash-flow gaps without derailing your savings plan.

Penalties and premature closure

According to the scheme note, there are no penalties for late payments and no penalties for premature closure before maturity. That is a big relief compared with traditional “fixed-amount” RDs. Still, because banks periodically update policies, it’s a good practice to reconfirm current rules at account opening. If you think you might need funds sooner, consider choosing a shorter tenure or maintaining two or three smaller Flexi RDs with staggered maturities so you can redeem one without touching the others.

Who benefits most from the Flexi RD

• Salaried individuals who want a disciplined monthly saving habit but face occasional spikes in expenses
• Families managing school fees, medical costs, and seasonal spending, who value the ability to increase or decrease monthly deposits
• Small business owners and freelancers with variable income who want the safety of a bank deposit without rigid monthly commitments
• First-time savers who need a forgiving structure that rewards consistency but doesn’t punish imperfect months

Documents and application

Opening the Flexi RD is straightforward. You’ll need:

• UBGB’s prescribed application form
• Copy of PAN card (or Form 60/61 if PAN is not available)
• Two photographs of each account holder/authorized signatory
• Proof of identity and address as per KYC norms

Carry originals for verification along with clear photocopies to speed up processing. If you already bank with UBGB, the process is even smoother since some KYC steps may be on file.

Smart ways to maximize your outcome

• Pick a realistic core installment you can sustain through normal months; treat top-ups as bonuses when you get extra income
• Sync your installment date with salary or peak cash-in weeks to avoid missed months
• Automate the core amount via standing instructions and add manual top-ups in high-income months
• Split big goals into multiple deposits with different maturities so you always have an option to redeem one while others keep compounding
• Review rates annually. If deposit rates rise, consider opening a new Flexi RD for fresh savings at the updated rate

Quick facts at a glance

• Who it’s for: Individuals with monthly income who want flexibility in deposit size
• Monthly deposit: Up to ₹1,00,000 (in multiples), with the freedom to vary month-to-month
• Tenure: 6 to 120 months
• Interest: Quarterly compounding at prevailing deposit rates
• Deposits: Cash or free branch transfers
• Loan against deposit: Up to 90% of the balance (per bank policy)
• Penalties: None for late payment or premature closure (as per scheme note)
• Nomination: Available for single accounts; not for minor accounts
• Tax: Scheme note says no TDS; interest may still be taxable as per your slab—confirm with the branch

Bottom line: UBGB’s GRAMIN SWA-SHAKTI FLEXI RECURRING DEPOSIT gives you the two qualities most savers actually need—discipline and flexibility. With quarterly compounding, adjustable monthly deposits, a loan-against-deposit option, and straightforward documentation, it’s a practical path to growing your money without locking yourself into a rigid schedule. If you’re ready to build wealth at your pace, this scheme makes it easy to start—and even easier to stick with.