A daily deposit scheme is a savings account funded by small cash contributions collected once a day, sometimes weekly, rather than by a lump sum or a fixed monthly transfer. It is the generic name for the product that coastal Karnataka calls a pigmy deposit.
The two terms describe the same mechanism and are used interchangeably across the industry. Canara Bank's version is branded the Nitya Nidhi Deposit; Nitya Nidhi India Limited, a Nidhi company, calls its own product a "Daily Deposit Scheme"; Maharashtra patpedhis such as Shivsahyadri Sahakari Patpedhi advertise "Daily Deposit" with minimums as low as ₹20 a day. Where "pigmy" carries the history of the 1928 Syndicate Bank scheme, "daily deposit" is the more neutral, descriptive label many institutions outside Karnataka prefer.
Terms vary as widely as the name. Minimum contributions run from about ₹10 to ₹100 a day depending on the institution, tenures span 12 to 63 months, and published rates range from about 1% to 8% a year across the institutions Pigmity has checked directly. There is no regulator-set rate for either name, and no institution's page routinely states its compounding method, so a "daily deposit" advertised at a given percentage is not automatically comparable to another scheme quoting the same figure.
What a daily deposit scheme is not is a recurring deposit. A recurring deposit debits a bank account you already hold, on a fixed date, by standing instruction; a daily deposit scheme depends on an agent physically collecting cash, which is why its rate typically sits well below what the same institution pays on a recurring deposit.