Fixed Deposits (FDs) are a popular savings tool in India for their fixed returns and low risk. PNB Housing Finance, a subsidiary of Punjab National Bank, offers FDs with competitive interest rates and flexible tenors. These FDs provide predictable returns, with rates varying by tenor and customer category. Senior citizens often receive slightly higher rates, making it important to understand these features before investing.
PNB Housing Finance FD Interest Rates
PNB Housing Finance provides FDs at attractive interest rates that vary based on the chosen tenure. As of the latest update, these rates range between 7.25% p.a. and 7.95% p.a. for general investors, while senior citizens could benefit from an additional 0.20% to 0.30% p.a. on the base rate.
Summary of Current FD Interest Rates:
| Tenure (Months) | General Citizens Interest Rate (% p.a.) | Senior Citizens Interest Rate (% p.a.) |
| 12 – 23 | 7.45% | 7.75% |
| 24 – 35 | 7.25% | 7.55% |
| 36 – 47 | 7.75% | 7.95% |
| 48 – 59 | 7.40% | 7.60% |
| 60 – 71 | 7.60% | 7.80% |
| 72 – 84 | 7.40% | 7.60% |
| 120 | 7.40% | 7.60% |
Interest rates are subject to change, so it is advisable to verify current rates on the official PNB Housing Finance website.
Comparing PNB Housing Finance FD Rates with Other FDs
Interest rates offered by PNB Housing Finance are often higher than those provided by traditional banks. Public sector banks typically offer lower rates for similar tenors, while PNB Housing Finance may provide more competitive rates, especially for longer tenures.
Comparison of FD Interest Rates:
| Bank / NBFC | Interest Rates for General Citizens (% p.a.) | Interest Rates for Senior Citizens (% p.a.) |
| HDFC Bank | 3.00% to 7.40% | 3.50% to 7.90% |
| ICICI Bank | 3.00% to 7.25% | 3.50% to 7.80% |
| SBI | 3.50% to 7.00% | 4.00% to 7.50% |
| Axis Bank | 3.00% to 7.10% | 3.50% to 7.75% |
| YES Bank | 3.25% to 8.00% | 3.75% to 8.50% |
| Bajaj Finance Ltd. | 7.40% to 8.10% | 7.65% to 8.35% |
| Shriram Finance Limited | 7.85% to 8.80% | 8.35% to 9.30% |
| Mahindra Finance Ltd. | 7.50% to 8.10% | 7.75% to 8.35% |
| Ujjivan Small Finance Bank | 3.75% to 8.25% | 4.25% to 8.75% |
| PNB Housing Finance Ltd. | 7.40% to 7.75% | 7.70% to 8.25% |
While comparing FD rates, factors such as the issuer’s credit rating and financial stability should also be considered.
Features and Benefits of PNB Housing Finance FDs
PNB Housing Finance FDs offer a variety of features designed to meet different financial needs:
Flexible Tenure
Available tenures range from 12 months to 120 months, allowing investors to align their investments with their financial goals. Longer tenures generally offer higher interest rates.
Premature Withdrawal
Premature withdrawal is possible, subject to certain conditions and penalties. This feature could provide liquidity if funds are needed before the FD’s maturity.
Interest Payout Options
PNB Housing Finance offers multiple interest payout options, including monthly, quarterly, half-yearly, and annually. This flexibility caters to various income needs, from regular payouts to lump-sum maturity amounts.
Loan Facility
Investors can avail of a loan against their FD, up to 75% of the deposit amount. This facility can be useful in emergencies, offering liquidity without breaking the FD.
Compounding Interest
Interest on these FDs is compounded annually, which could result in higher returns over time compared to simple interest options. For example, investing ₹1 Lakh in a 3-year FD at 7.00% p.a. compounded annually could grow to approximately ₹1,22,504 upon maturity.
Tax Implications on PNB Housing Finance FDs
Interest earned on PNB Housing Finance FDs is taxable under the Income Tax Act, 1961. If the interest income exceeds ₹40,000 in a financial year (₹50,000 for senior citizens), Tax Deducted at Source (TDS) applies at 10%. Investors can submit Form 15G or Form 15H to avoid TDS if they are not liable to pay tax. The tax treatment is similar to that of FDs issued by banks and other Non-Banking Financial Companies (NBFCs).
Factors to Consider Before Investing in PNB Housing Finance FDs
Before investing in PNB Housing Finance FDs, it is essential to consider various factors:
Tenure
Choose a tenure that matches your financial goals. Longer tenures often provide higher interest rates but may lock in funds for an extended period.
Liquidity
Assess your need for liquidity. Understand the premature withdrawal terms, as early withdrawal may incur penalties.
Credit Rating
Review the credit rating of PNB Housing Finance. A higher rating indicates greater financial stability, which could enhance the security of the investment.
Taxation
Consider the impact of taxes on your interest income. The effective return on investment may be lower after accounting for taxes.
How to Open a PNB Housing Finance FD
Opening a PNB Housing Finance FD is straightforward and can be done through both online and offline channels. The process involves submitting an application form along with necessary documents such as identification proof and address proof. For online applications, investors need to visit the PNB Housing Finance website, select the FD product, and complete the online form. Offline applications can be processed at any PNB Housing Finance branch.
Conclusion
PNB Housing Finance FDs are a viable option for investors seeking a low-risk investment with fixed returns. Offering competitive interest rates, flexible tenures, and features such as loans against FDs, they cater to a wide range of financial needs. However, comparing rates from different issuers, considering your liquidity requirements, and understanding the terms of investment are crucial before making a decision. Always verify the latest interest rates and terms on the official PNB Housing Finance website.