Uttar Bihar Gramin Bank Recurring Deposit

If you want a disciplined, no-fuss way to build a lump sum over time, the Uttar Bihar Gramin Bank (UBGB) Recurring Deposit (RD) is a strong, low-risk option. You choose a small monthly amount, pick a tenure, and watch your savings grow—perfect for goals like a child’s education fund, a festival budget, or an emergency cushion. Here’s a clear, jargon-free walkthrough of how UBGB’s RD works and how to make the most of it.

Who can open an RD (Eligibility)

• Individual account: Open and operate in your own name.
• Joint account (up to four members): Ideal for families or partners saving toward a shared goal.
• Minor account (10+ years): Minors aged 10 years or above can open an RD in their own name or jointly with a guardian, as per bank/KYC rules.

Your monthly deposit and payment modes

• Minimum installment: Start from as low as ₹5 per month (in multiples of ₹5).
• How to pay: Deposit in cash at the branch or through an inter-account transfer from your UBGB account. You can also ask the branch about standing instructions so your installment goes in automatically every month.

Tenure options

UBGB RDs are flexible: choose any tenure from 6 months to 10 years. Short tenures help you reach near-term goals quickly, while longer tenures let compounding work harder, often resulting in a larger maturity amount for the same monthly installment.

Interest rates and extra benefits

• Interest rates: These change from time to time. Check with your branch for the current RD rate applicable to your chosen period.
• Senior citizens (60+): +1.0% additional interest.
• Staff / Ex-staff / Widows & Widowers of staff: +1.0% additional interest.

The additional interest is applied over the prevailing rate for your tenure, according to bank policy. If you qualify for a benefit, confirm it at account opening and ensure it’s recorded in your account details.

Nomination facility

A nominee can be added for individual and joint RDs. This is a quick, one-time step that ensures your savings pass to the intended person without legal complications. If your family situation changes, you can update your nominee later.

Loan against your RD (liquidity when you need it)

Need funds mid-way without breaking your deposit? You can take a loan against your RD up to 90% of the accumulated amount (subject to bank approval and policy). Your RD continues to earn interest while you handle a temporary cash-flow need—useful for short-term emergencies or opportunities.

Premature closure

You may close the RD after one month from the last installment or at the end of the account term, whichever is later. You’ll receive interest as per bank rules applicable for the period the deposit actually stayed. If you think you might need money sooner, discuss a suitable tenure at the start or keep a separate short-tenure RD for flexibility.

Late-deposit penalties (important)

A penalty applies if a monthly installment is paid late. The scheme note provided mentions “₹1058 per ₹100 per month.” This looks unusually high and may be a typographical error. Please reconfirm the exact penalty figure with your branch before opening the account. The simplest way to avoid any penalty is to set standing instructions so your installment is auto-debited each month.

TDS and taxation

The scheme note says TDS is not applicable on RDs. Even so, interest you earn is generally taxable as per your individual income-tax slab. Because tax rules and thresholds can change, confirm the current TDS practice at your branch and speak to your tax advisor if needed.

Documents you’ll need (account opening)

• UBGB RD application form (prescribed format)
• PAN card; if unavailable, Form 60/61
• Proof of identity and address (as per accepted KYC)
• Photographs of the account holder(s)
• For minors, carry age proof and the guardian’s KYC documents

Carry originals for verification and clear photocopies to speed up processing.

How to open your RD in five easy steps

1. Pick a goal and tenure: Decide what you’re saving for and when you’ll need the money.
2. Choose a monthly amount: Start small (even ₹5) and scale up when your cash flow improves.
3. Set payment mode: Enable standing instructions or inter-account transfer to avoid missed installments.
4. Add a nominee: Do this on day one—it’s quick and protects your family.
5. Collect your acknowledgments: Keep your passbook/receipt safe; update it regularly to track progress.

Smart tips to get more from your RD

• Align installment date with income: Pick a date right after salary or business inflows so you never miss a month.
• Create multiple RDs: For different goals and time horizons (e.g., 12-month travel fund, 36-month education fund).
• Step-up your savings: When income rises, either increase your installment (open a new RD if required) or start a second RD.
• Use loan-against-RD for short gaps: It can be cheaper and simpler than breaking the deposit.
• Track interest rate updates: If rates improve, ask the branch whether a new RD at the updated rate makes sense for a new goal.

Who should consider this RD

• First-time savers who want a predictable, low-risk path to a lump sum
• Families planning for education fees, ceremonies, or big purchases
• Salaried individuals who benefit from disciplined, automated monthly saving
• Senior citizens who qualify for extra interest and prefer steady growth over market volatility
• Small business owners who want to park small surpluses monthly without complex paperwork

Quick answers to common questions

What is the minimum deposit?
₹5 per month (in multiples of ₹5). You can always deposit more if your budget allows.

What tenures can I choose?
Anything from 6 months to 10 years. Pick a period that matches your goal.

Can I get a loan without closing the RD?
Yes. Up to 90% of the RD value may be available as a loan, subject to bank policy.

Is there TDS on RD interest?
The scheme note says TDS is not applicable. However, interest is taxable as per your slab. Confirm the latest TDS practice at your branch.

Is there a penalty if I pay late?
Yes. A penalty applies for late installments. The figure shared (₹1058 per ₹100 per month) appears inconsistent; please verify the accurate amount with the branch and set standing instructions to avoid penalties.

The bottom line: UBGB’s Recurring Deposit is a simple, flexible way to turn small monthly savings into a meaningful corpus. With low entry amounts, wide tenure choices, a loan-against-RD option, and nomination for safety, it ticks all the boxes for practical, goal-based saving. Visit your nearest UBGB branch to check today’s interest rates and open your RD in minutes.