Uttar Bihar Gramin Bank MONTHLY INTEREST DEPOSIT SCHEME

If you like the certainty of a fixed deposit but prefer a steady cash flow every month, the Uttar Bihar Gramin Bank (UBGB) Monthly Interest Deposit Scheme is a practical fit. You invest a lump sum once, the bank pays out the interest every month to your linked account, and you get your principal back at maturity. It’s simple, predictable, and ideal for covering regular expenses like rent, medicines, school fees, or utility bills—without dipping into your capital.

Who can open it (Eligibility)

This scheme is open to individuals and joint account holders (including families) as well as minors above 10 years as per bank norms. If the account is in a minor’s name, operation will follow the bank’s KYC/guardian rules. The broad eligibility makes it easy to align with most household and personal finance needs.

How much and how long (Investment & Tenure)

You can start with a minimum deposit of ₹1,000, and there is no maximum limit—you can invest larger amounts in multiples of ₹1,000 to suit your income goals. The tenure ranges from 12 months to 120 months, in multiples of 3 months. Shorter tenures suit near-term needs or rate re-checks; longer tenures offer stability when you’re building a dependable monthly income stream.

What interest will you earn (Rates & Extras)

Your return depends on the prevailing rate for the tenure you choose on the day you open the deposit. UBGB also offers additional interest to specific categories:

• Senior citizens: +0.50%
• Staff / ex-staff / widows or widowers of staff: +1.00%

Confirm your eligibility for the extra rate at account opening and ensure it is clearly recorded on your receipt/certificate.

How the monthly payout works (Interest credit)

UBGB credits interest monthly to your designated savings/current account, giving you a consistent cash inflow. Interest is accrued as per the bank’s compounding rules for the chosen tenure and then paid out monthly, while your principal remains intact until maturity. This structure is perfect if you want a regular “income-like” flow without touching your capital.

Liquidity options (Loan vs. premature withdrawal)

You don’t have to break the deposit to access funds:

• Loan against deposit: Borrow up to 90% of your deposit amount (subject to bank approval and policy). It’s a convenient bridge for short-term needs, allowing your deposit to continue earning while you handle a temporary cash gap.
• Premature withdrawal: Allowed with interest rate reductions as per bank rules. For deposits above ₹2,00,000, a 1% penalty applies on early closure. If you think you might need money earlier, consider splitting a large amount into two or three smaller deposits with staggered maturities so you can redeem one and keep the others running.

TDS and taxes (What to expect)

TDS on interest applies as per income-tax rules. Submitting Form 15G/15H (if eligible) can help manage TDS, but remember: TDS is not the same as your final tax. Interest from bank deposits is generally taxable according to your slab; keep your interest certificates for filing your return accurately.

Nomination (Don’t skip this)

A nomination facility is available for eligible account holders and is not available for minor accounts. Adding a nominee takes minutes and ensures the proceeds pass quickly to the intended person with minimal paperwork. Update the nominee whenever there’s a major life change.

Renewal made easy

If you don’t provide renewal instructions at maturity, UBGB will automatically renew the deposit for the same duration at the prevailing rate on the renewal date. This is convenient, but it’s smart to set a reminder a few weeks before maturity so you can compare rates, adjust tenure, or redeem if needed.

Who benefits most from a Monthly Interest Deposit

• Retirees and senior citizens who value steady monthly inflows and may qualify for the extra 0.50% rate
• Families who want to match predictable expenses (rent, tuition, EMIs) with predictable income
• Conservative savers who prefer guaranteed returns and a clear plan over market volatility
• Anyone with a lump sum (bonus, maturity proceeds, inheritance) seeking reliable monthly cash flow without eroding principal

How to open (Step-by-step)

1. Pick your goal and tenure: Decide how long you want the monthly income.
2. Confirm today’s rate: Ask the branch for the rate applicable to your chosen tenure and whether you qualify for an additional interest category.
3. Choose the deposit amount: Start from ₹1,000 and scale up in multiples of ₹1,000 to reach your desired monthly interest.
4. Complete KYC and the application form: Carry PAN (or Form 60/61 if PAN isn’t available), valid ID/address proof, and photographs as per bank requirements.
5. Add a nominee: Do this during account opening for peace of mind.
6. Link the credit account: Specify the savings/current account where the monthly interest should be credited.
7. Collect your certificate: Verify the tenure, rate (including any extra %), maturity date, and payout instructions.

Smart tips to get more from this scheme

• Match income to expenses: Estimate your monthly bills and invest an amount that generates roughly that interest.
• Ladder large sums: Split a big investment across multiple deposits with different start dates; you’ll get rolling maturities and flexibility.
• Keep an emergency buffer outside the deposit: This reduces the chance of premature closure.
• Set calendar reminders: Note the credit date each month and the maturity date to avoid surprises.
• Review rates annually: When deposits mature, compare current rates and reset your tenure if needed.

Quick answers to common questions

Is there a maximum investment limit?
No. The minimum is ₹1,000, with no upper cap (in multiples of ₹1,000).

How often is interest paid?
Monthly, directly to your linked account.

Do senior citizens get extra interest?
Yes, +0.50% over the applicable rate. Staff/ex-staff and eligible family members get +1.00%.

Can I get a loan without closing the deposit?
Yes. Up to 90% of the deposit, subject to bank policy.

What happens if I withdraw early?
You can close prematurely with a reduced effective interest; for deposits above ₹2,00,000, a 1% penalty applies.

Will the deposit renew automatically?
Yes, if no instructions are given, it renews for the same tenure at the prevailing rate on the renewal date.

Bottom line: UBGB’s Monthly Interest Deposit Scheme turns a one-time investment into reliable monthly income, while keeping your principal secure until maturity. With broad eligibility, flexible tenures, optional loan-against-deposit, nomination, and straightforward paperwork, it’s a clean, no-drama way to make your money work for your monthly needs. Visit your nearest UBGB branch to check the day’s rate and get started.