National Housing Bank is a wholly owned unit of Reserve Bank of India. In the year 1987, an act of the parliament led to the birth of this institution. NHB is the apex body for housing finance in the country. This financial institution has been set up with the aim of acting as the principal agency to promote housing loans at local as well as regional levels. NHB also endeavours to provide financial and related support to other agencies that indulge in matters related to housing finance. The functions of NHB include registering, regulating, and supervising Housing Finance Companies (HFCs) and keeping surveillance as well as coordinating with other housing finance regulators.
NHB offers a wide variety of financial products and services and indulges in a host of financial functions. NHB fixed deposits have been rated FAAA by CRISIL and TAAA by Fitch both of which are world renowned rating agencies. This makes these deposits a safe and a profitable choice for customers.
Apart from these functions, NHB also offers various financial products and tools like fixed deposits which are very popular with the public in general. These FDs offer customers attractive returns for deposits held for differing tenures.
The following are the entities that are eligible to open a Fixed Deposit with NHB –
NOTE: To open a fixed deposit, a minimum deposit of Rs. 50,000 is required.
National Housing Bank offers a total of three fixed deposit schemes to choose from. Each of these schemes is listed below along with its main features and benefits.
This fixed deposit scheme is applicable to all individuals, trusts, societies, partnership firms and so. The minimum deposit amount required is Rs. 50,000 and there on in multiples of Rs. 10000. Both cumulative as well as non-cumulative schemes are available under this fixed deposit category. Nomination and pre-closure options are available and are subject to bank regulations.
Suvriddhi Scheme of fixed deposit is specially made for customers who are looking to save on tax through their fixed deposit. This scheme too is available both in variants of cumulative as well as non-cumulative types. The minimum amount required for this fixed deposit account is Rs. 10,000 and thereby in multiples of Rs. 1000. The maximum amount that can be deposited per year is Rs. 1,00,000. All individuals and HUFs can apply for this fixed deposit product. Tax benefits under section 80C of the Income Tax Act are applicable.
This fixed deposit scheme is specially designed for Housing Finance Companies. The scheme has been rated FAAA and AAA by CRISIL and by FITCH respectively. This is applicable only to agencies that accept deposits from public. Both cumulative and non-cumulative interest pay-out options are available under this deposit scheme.
The minimum amount required to open a fixed deposit account depends on the type of fixed deposit scheme that you wish to avail. Here is a list of the applicable amounts –
Minimum Amount Required – Rs. 50,000
Minimum Amount Required – Rs. 10,000
Minimum Amount Required – Rs. 25,00,000
Maximum Amount Allowed – Rs. 1,00,00,000 per depositor
Minimum Amount Allowed – Rs. 1,00,000
Minimum Amount Allowed – Rs. 50000000, after which NHB approval is required
For opening a fixed deposit account with NHB, you need to visit the nearest NHB local branch and get the application form, fill it and submit it along with the required details.
According to the fixed deposit scheme availed, the applicable rate of interest varies –
| Duration of Deposit | Rate if Interest |
|---|---|
| 12 Months | 8.25% |
| 24 Months | 8.25% |
| 36 Months | 8.50% |
| 60 Months | 8.50% |
The subsequent rates for senior citizens are 0.6% over and above the regular rates mentioned in the table.
Rate of Interest – 8.5% per annum and 9.10% per annum for senior citizens
Rate of Interest – 8.5% per annum and 9.10% per annum for senior citizens
Yes. NHB SUVRIDDHI (Tax Saving) Term Deposit Scheme offers deposits which fetch an income tax exemption under section 80C of the Income Tax Act.
Yes. In case the interest on the FD is equal to or more than Rs. 10000 in a year, income tax at 10% is deducted. However, if the interest received in a year is more than Rs. 10000 and the PAN number has not been provided then a tax of 20% on the interest received is levied.
Here are a few exciting and differentiating features of NHB fixed deposits:
No. Loans are offered only to agencies that act as lenders of loans to individual borrowers.
Yes. Special and higher rates of interest are offered to senior citizens who hold a fixed deposit. The rates are mostly, 0.6% above the regular rates offered by the bank.
No. Currently, credit cards from National Housing Bank are not available as a financial product.
Yes, premature withdrawals are allowed by National Housing Bank subject to certain terms and conditions.
Premature withdrawals are not allowed in the first three months of a deposit, counted from the date the money was deposited.
If a withdrawal is made after 3 months but before 6 months no interest will be paid on the amount. If a premature withdrawal is made after 6 months and before the maturity date a penalty which is 2% lower than the interest rate will be charged for the period that the deposit was active. In cases where there is no specified interest rate for that particular period a penalty which is 3% lower than the minimum rate at which HDFC accepts public deposits will be levied.
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