PNB FD Rates: Guaranteed profit of ₹ 4.07 lakh on deposit of ₹ 5 lakh, know the complete details of FD of 1 to 10 years

Bank Fixed Deposit (FD) is still the most preferred choice of crores of middle class families and senior citizens of the country for safe investment and fixed returns with government guarantee. Punjab National Bank (PNB) offers attractive interest rates to its customers on various tenures ranging from 7 days to 10 years. If you are thinking of investing a lump sum of ₹5,00,000 (₹5 lakh) kept in your bank account, then the magic of Quarterly Compounding can almost double your savings in the long run. Over a long period of 10 years, an investment of ₹5 lakh results in a direct net profit of over ₹4.07 lakh. Let us understand how PNB interest rates work for different tenures and what additional benefits senior citizens get compared to ordinary citizens.

In PNB, interest is calculated on Quarterly Compounding basis, due to which the actual return (Annualised Yield) received by the investor is higher than the normal interest rate. As per current structure:

• 1 year (365 days): for ordinary citizens 6.80%For senior citizens 7.30%

• 2 years: for ordinary citizens 6.80%For senior citizens 7.30%

• 3 year: for ordinary citizens 7.00%For senior citizens 7.50%

• 5 Years (Tax Saver): for ordinary citizens 6.50%For senior citizens 7.00%

• 10 years (long term): for ordinary citizens 6.50%For senior citizens 7.30% (Up to 7.60% for Super Senior Citizens)

If you fix an amount of ₹ 5,00,000 in PNB for a period ranging from 1 year to 10 years, then the details of the total amount and interest received on maturity on the basis of quarterly compounding are as follows:

(Note: Net profit of ₹4.07 lakh to ₹4.52 lakh on ₹5 lakh is generated due to compound interest in 10 year FD.)

Punjab National Bank offers to senior citizens (60 years and above) 50 basis points more than the normal rates i.e. 0.50% additional interest Gives. Additionally, Super Senior Citizens above 80 years of age get additional interest benefit of up to 0.80% on tenure above 5 years.

• TDS Rules: As per income tax rules, the bank deducts 10% TDS if the interest received from FD exceeds ₹40,000 in a financial year for general citizens and ₹50,000 for senior citizens. If the total annual income is less than the taxable limit, the general citizen Form 15G and senior citizens Form 15H You can stop TDS deduction by depositing.

• Section 80TTB: Senior citizens get the benefit of full tax exemption under Section 80TTB of the Income Tax Act on interest up to ₹50,000 earned from bank FDs.

If you want to avail tax exemption under Section 80C, then PNB’s 5 Year Tax Saver FD is a safe option. In this, tax deduction can be claimed on investments up to ₹ 1.5 lakh in a financial year. However, keep in mind that Tax Saver FD has a mandatory lock-in period of 5 years, that is, this money cannot be withdrawn before the completion of the period nor can any loan be taken against it.