These are the questions we are asked most often. Each answer is short by design; the guide it links to carries the sources and the detail.
If your question is not here, or an answer is wrong, write to hello@pigmity.com. We would rather be corrected than be wrong quietly.
Questions
- What is a pigmy deposit?
- A savings account where an authorised agent visits you on a fixed route, collects a small amount in cash, and issues a receipt. The money earns interest and is paid out at maturity. Syndicate Bank started the scheme in Udupi in 1928. No published count exists of the institutions that run it today.
- What interest does a pigmy account pay?
- There is no single rate. Among the institutions in Pigmity's directory that publish one, rates read in September 2026 run from nil, for accounts closed early, to 8% a year on a two-year term. Anyone quoting a pigmy rate without naming the institution and the date is guessing.
- Is my pigmy deposit insured?
- It depends on the institution, not the product. Deposit insurance from the DICGC covers co-operative banks up to Rs 5,00,000 per depositor. The DICGC states that primary co-operative societies are not insured by it, so the same-looking account at a patpedhi, credit society or Nidhi company carries no such cover.
- How much commission does a pigmy agent earn?
- Usually a percentage of what they collect. Maharashtra capped it at 2.5% for credit co-operatives from 1 April 2026 and raised the cap to 3% in June 2026. There is no national cap, and one multi-state society advertises 4.5% plus 0.5% to recruit agents.
- Does the commission come out of my deposit?
- For banks, no: the bank pays the agent as its own cost, which is why the rate on the product is low. In Maharashtra's credit societies it is disputed. The chairman of the state federation says customers typically bear it, and the mechanism is undocumented. If you hold an account at a society, ask.
- How quickly must my money reach my account?
- For a co-operative bank, the RBI directions require cash collected at your door to be credited the same day or the next working day, depending on when it was collected, and require the bank to give you an advice stating the date of credit.
- Is a pigmy deposit better than a recurring deposit?
- Not on returns. The same bank will usually pay several times more on an ordinary deposit than on its own daily-collection scheme. What the pigmy account buys is access and discipline: somebody comes to you every day. Whether that is worth the gap depends on whether you would otherwise save at all.
- Can any co-operative bank appoint collection agents?
- No. Since December 2025 the RBI directions allow Tier 3 and 4 urban co-operative banks to use employees or agents, while Tier 1 and 2 banks may use only their permanent employees. Tier 1 and 2 are banks with deposits up to Rs 1,000 crore.
- What happens if I close the account early?
- It varies and the penalties are severe. One bank pays no interest at all on an account closed inside 12 months, another deducts 5% of the deposit before six months, and Canara Bank reduces interest by slab with a further penalty inside a year. Ask for the figure in writing before you open the account.
- Does Pigmity sell any of this?
- No. Pigmity is an information site, not a bank, society, Nidhi company, regulator, adviser or software vendor, and it sells no product or service. We take no payment for placement or mention, and we publish no product recommendations. See our editorial policy.