FIXED OR TIME DEPOSITS
| Time deposits are deposits accepted by banks for a specified period of time. In terms of RBI directives the minimum period for which term deposits can be accepted is 15 days. The bank generally does not accept deposits for periods longer than 10 years. |
| •There are three types of Time Deposits such as RD, TDR & STDR |
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RD |
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TDR |
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STDR |
| • It is Special Investment Scheme, where higher rate of interest is available with compounding effect at quarterly rests. Thus helps in money getting multiplied quickly. |
| •Minimum deposit amount Rs. 100.00 |
| • Account opening form. |
| • Bank pays interest on term deposits based on the period of deposits and normally pays higher interest for longer term deposits. |
| • Bank has full discretion to fix their interest rates on deposits and these rates are varied from time to time depending on market conditions |
| • Changes made in interest rates from time to time. However, no change in contractual rate of interest in respect of existing deposits |
| • When bank quotes a certain percentage of interest per annum for a given period it is understood that interest payments are made on a quarterly basis. |
| •The depositor can collect interest in every quarter or its discounted value at monthly rests or avail quarterly compounding benefits and receive principal and interest on maturity |
| • There is provision of penalty for premature encashment of deposits at customer’s discretion. Bank pay interest on such deposits as applicable for the period for which deposit has been kept with the bank (less penalty if levied). |
| • Bank allows loans against the fixed deposits (TDRs/STDRs) at request. Margin retained over the deposit outstanding and interest rates charged thereon are decided by the bank. Presently Bank allows up to 90% of the face value as loan against pledge of such deposits. |
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Opening of a time deposit Account |
| Normally the requirements as given under savings bank account apply to time deposits also. Also the requirements regarding furnishing of PAN number applies only to time deposits over Rs.50,000/- made in cash. |
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Important Note |
| Please avail nomination facility while placing a term deposit with your bank. |