October 7, 2026 · Guides

Deposit Rules for Nidhi Companies: Limits and the 1:20 Ratio

The nidhi company deposit rules decide how much money a Nidhi can safely hold, from whom, and for how long. Get them wrong and the Registrar can come after you, so they are worth knowing before the first deposit slip is printed. This guide covers the deposit types, the savings cap, early withdrawal terms and the 1:20 ratio. Figures are as we read the Rules; please confirm the current text before acting.

In this guide

Who can deposit
Types of deposits and tenure
Withdrawing before maturity
The 1:20 ratio
The 10% unencumbered deposit
Interest and filings
Related reading
FAQs

Who can deposit

Deposits can come from members only. A Nidhi cannot take money from the public, cannot advertise to attract deposits and cannot pay brokerage to anyone for bringing them in. Make sure the depositor is already on the register; our note on who can be a member of a Nidhi company explains how.

Types of deposits and tenure

Deposit	Rule
Fixed deposit	6 to 60 months
Recurring deposit	12 to 60 months
Savings account	Balance cap of Rs 1 lakh

A Nidhi is not a bank. It cannot run current accounts or offer cheque facilities to the public. If a product does not fit one of the three types above, stop and check the Rules before launching it.

Withdrawing before maturity

As the Rule is usually summarised, a member cannot withdraw a deposit within the first 3 months. Between 3 and 6 months, the money can come back but without interest. After 6 months, interest is paid at the contracted rate reduced by 2%. Read the current Rule text and write it into your deposit terms word for word, because members will quote it back to you.

The 1:20 ratio

Net owned funds (NOF) to deposits must not be more than 1:20. In other words, for every Re 1 of NOF the Nidhi can hold at most Rs 20 of deposits. A Nidhi with NOF of Rs 50 lakh can therefore carry deposits up to Rs 10 crore, and not a rupee more.

This is why capital planning matters. If you grow deposits faster than you grow NOF, you breach the ratio. Our post on net owned fund explains how NOF is worked out (note that the Nidhi figure in that older post pre-dates the 2022 amendment, which put the NDH-4 threshold at Rs 20 lakh). See also capital needed to start a Nidhi.

The 10% unencumbered deposit

Alongside the ratio, a Nidhi must keep unencumbered term deposits of at least 10% of its outstanding deposits, placed with a scheduled commercial bank in the Nidhi’s own name. We cover this in unencumbered term deposits and interest limits.

Interest and filings

Interest on deposits is limited by the ceiling the Rules tie to the RBI-prescribed rate for NBFC deposits. Deposits also show up in your returns, including NDH-3 each half year and DPT-3 each year; confirm with your CA whether DPT-3 applies and what to report. The wider legal frame is in the Nidhi Act and Nidhi Rules 2014, and the lending side in loan rules for Nidhi companies. Check due dates on the MCA portal.

Need help with your Nidhi company? See our Nidhi company registration service, call +91 93117 95484, or write to mail@taxhint.in.

FAQs

What is the 1:20 ratio for a Nidhi company?

It caps deposits at 20 times the net owned funds. With NOF of Rs 1 crore, deposits cannot go above Rs 20 crore.

What is the maximum balance in a Nidhi savings account?

Rs 1 lakh per account, as the Rules read. Anything above that cannot sit in a savings account with the Nidhi.

For how long can a Nidhi take fixed and recurring deposits?

Fixed deposits run from 6 to 60 months and recurring deposits from 12 to 60 months. Terms outside those windows are not allowed.

Can a Nidhi accept deposits from the public?

No, members only. Soliciting deposits through advertising or paying brokerage is also prohibited.