1. Permissibility under Nidhi Rules

• Nidhi Companies are permitted to offer savings account facilities only to their registered members.
  
• The collection of savings deposits is governed by Rule 11 of the Nidhi Rules, 2014.
  
• These accounts are part of the company’s mutual benefit model and must not be extended to the general public.
  
• Only one savings account is allowed per member to ensure regulatory control.
  
• All savings deposit activities must align with the company’s approved policies and legal provisions.
  

2. Maximum Interest Rate Allowed

• A Nidhi Company cannot pay more than 2% above the interest rate offered by nationalized banks on savings accounts.
  
• This limit is imposed to prevent unhealthy competition with mainstream financial institutions.
  
• The reference rate must be based on the prevailing interest rate of public sector banks.
  
• If the nationalized bank rate is 3%, the Nidhi Company can offer up to 5% maximum.
  
• Offering a higher rate than allowed is a regulatory violation.
  

3. Internal Policy and Board Approval

• The rate of interest must be approved by the Board of Directors and documented in company policy.
  
• Changes to the interest rate must also be board-approved and consistently communicated to members.
  
• The policy must specify the calculation method, frequency of credit, and conditions of eligibility.
  
• Interest calculation is usually done on a daily balance or a monthly minimum balance basis.
  
• The rules must be transparent, uniformly applied, and available for inspection.
  

4. Payment Procedure and Accounting

• Interest must be credited at regular intervals, generally monthly, quarterly, or annually.
  
• Proper entries must be made in the savings ledger and reflected in the member’s account statement.
  
• The company must maintain sufficient liquidity to meet the interest payout obligations.
  
• All payments must comply with accounting standards and be subject to audit.
  
• Any discrepancies must be resolved promptly and documented.
  

5. Compliance Monitoring and Limitations

• Interest payment practices are reviewed during the statutory audit and regulatory inspection.
  
• The company must not offer incentives or commissions to promote savings deposits.
  
• Interest on savings deposits should not be linked to any bonus or investment schemes.
  
• Non-compliance with interest limits or procedures can lead to penalties or loss of Nidhi status.
  
• The company must keep detailed records and ensure transparency in all savings account operations.