Bank computes interest based on the actual number of days’ in a year. In case, the deposit is spread over a leap or a non-leap year, the interest is calculated based on the number of days. i.e. 366 days in a leap year & 365 days in a non-leap year.
Tax Deduction at Source (TDS)
As per section 206AA introduced by finance (No.2) Act, 2009 wef 01.4.2010, every person who receives income on which TDS is deductible shall furnish his PAN, failing which TDS shall be deducted at the rate of 20% (as against 10% which is existing TDS rate). in case of domestic deposits and 30% plus applicable surcharge and health and Education Cess in case of NRO deposits”. Please further note that in the absence of PAN as per CBDT circular no: 03/11. TDS certificate will not be issued. In absence of PAN, Form 15G/15H and other exemption certificates will be invalid even if submitted and TDS at higher rate will be applicable.
Every person who has been allotted a Permanent Account Number (PAN) and is eligible to obtain Aadhaar number, must link their PAN with Aadhaar as per provisions of Section 139 AA of the Income Tax Act 1961. Further non linking of PAN with Aadhaar shall make PAN “inoperative” and
1 ) TDS / TCS would be deducted /collected at Non PAN rate (including cash withdrawal) .
2 ) Form 15G/H with inoperative PAN will not be accepted
3) Existing Form 15 G / H becomes ineffective till PAN remains inoperative.
TDS is applicable from time to time as per the Income Tax Act, 1961 (IT Act) and Income Tax Rules, 1962. The current rates applicable for TDS would be displayed on Bank’s website. Currently, TDS is deducted when the aggregate interest paid / credited across all FDs, RDs exceeds the threshold limit of Rs. 40,000/- for residents and Rs. 50,000/- for resident senior citizens in a financial year (FY) for a customer. Further, Tax is deducted at the end of the financial year on Interest accruals, if applicable.
In case of inoperative PAN (PAN not linked to Aadhar), TDS will be deducted @ 20% and no 15G/H form can be submitted during inoperative PAN period.
If customer is non-ITR filer i.e specified person as per Income tax portal TDS will be deducted @ 20%.
For renewed deposits, the new deposit amount consists of the original deposit amount plus Interest Less TDS, if any, less compounding effect on TDS. For reinvestment deposit, the interest reinvested is post TDS recovery and “hence the maturity amount for reinvestment deposits would vary to the extent of tax and compounding effect on tax for the period subsequent of deduction till maturity.
As Per Section 139A(5A) of IT Act, every person receiving any sum of income or amount from which tax has been deducted under the provisions of IT Act shall provide his PAN to the person responsible for deducting such tax. In case PAN is not provided as required, the bank shall not be liable for the non availment of the credit of Tax deducted at Source and non-issuance of TDS certificate.
If your PAN is not updated with the Bank or is incorrect; please visit your nearest branch to submit your PAN details.
No deductions of Tax shall be made from the taxable interest in the case of an individual resident in India, if such individual furnishes to the Bank, a declaration in writing in the prescribed Format (Form 15G / Form 15H as applicable) to the effect that the tax on his estimated total income for the year in which such interest income is to be included in computing his total income will be Nil. This is subject to PAN availability on Bank records.
Deposit amount exceeding Rs 50 k or aggregated value of all outstanding FDs/RDs booked in same customer id during the Financial Year exceeds INR 5Lakhs limit (*) then PAN/Form 60 is mandatory.
I agree to the Bank issuing certificate in the prescribed form for tax deducted at source on interest on Fixed Deposits, after the end of every calender quarter
In absence of PAN/Form 60: (a) FD/RD will not be renewed on maturity and maturity proceeds will be credited to your linked account or a Demand Draft will be sent to your mailing address as updated in Bank’s records. (b) Maturity instructions to convert RD proceeds to FD will not be acted upon and RD proceeds will be credited to your linked account on maturity.
The maximum interest not charged to tax during the financial year where form 15 G/H is submitted is as below:
Upto 3, 00,000/- for residents of India below the age of 60 years or a person (not being a company or firm).
Upto 7,00,000/- for senior citizen residents of India above the age of 60 years any time during the FY
Form 15G/15 H to be submitted by customer in duplicate to the bank, one copy for Bank record and second copy to be returned to customer with Branch seal as an acknowledgment.
Form 15G/15H needs to be submitted for every fixed Deposits booked with bank for Tax exemption.
The bank shall not be liable for any consequences arising due to delay or non-submission of Form 15G/15H
To enable us to serve you better kindly submit the Form 15G/15H latest by April 1st of the new financial year
Note: The above guidelines are subject to change as per Income Tax regulations /directives of Finance Ministry Govt of India prevalent from time to time.
Automatic Renewal We will be happy to renew your deposit, unless we hear from you to the contrary, for the same period as the original deposit, at the prevailing rate of interest. You can change the deposit instruction within 7 days. Without prejudice to clause above, I hereby authorise the Bank and/or its authorised person to approach me through various mode of communication, viz. via email, telephone call, voice bot (through chat bot or any other Artificial Intelligent Tool), message, etc. and seek my consent/confirmation to renew the existing Fixed Deposit for same tenure and at the prevailing applicable rate of interest. I confirm that the consent/confirmation given by me through the above channels for renewal shall be treated as written instruction / advice given by me to the Bank for renewal of the Fixed Deposit as above.
I agree that on maturity of my Fixed Deposit, in absence of my written instructions on disposal, the Bank reserves the right at its discretion to renew the deposit along with accrued interest thereon at prevailing rates of interest for a similar tenor of the deposit which has matured.
Premature Encashment
With effect from July 22nd, 2023, the interest rate applicable for premature withdrawal including Sweep-in/Partial Withdrawal will be 1% lower (as applicable) of the rate on the date of deposit booked, to the period for which deposit remained with the bank and not at the contracted rate.
In the event of death of one of the joint account holders, the right to the deposit proceeds does not automatically devolve on the surviving joint deposit account holder, unless there is a survivorship clause.
In case of joint fixed deposits with a survivorship clause, the Bank shall be discharged by paying the Fixed Deposit proceeds prematurely to survivor/s equally, on request, in the event of one or more Joint Depositor.
In the case of premature encashment, all signatories to the deposit must sign the encashment instruction.
All premature encashment will be governed by rules of Reserve Bank of India Prevalent at the time of encashment.
As per IT laws, if aggregate amount of the deposit/(s) held by a person with a branch either in his own name or jointly with any person on the date of repayment together with the interest at payable is equal to or exceeds 20,000/- then the amount will be paid by bank draft drawn in the name of the deposit holder or by crediting the savings / current account of the deposit holder.
Partial Premature withdrawal and sweep-in facility is not allowed for fixed deposits with amount>=5 cr to< 25 cr.
Prior to 22nd July 2023, the applicable rate for Premature Withdrawal (for all deposits including Sweep-in / Partial Withdrawal), will be 1% below (as reduced rate ) of the lower of either:
- a) The rate for the original /contracted tenor for which deposit has been booked or
- b) The base rate* applicable for the tenor or which the deposit has been in force with the bank. The base rate will be as follow –
( I ) For deposits < 5 crore booked on or after 7th March’19, the base rate (mentioned above in point b) is the rate applicable to deposits of less than Rs. 2 Crore as on the date of booking the deposit. Prior to this the base rate is the rate applicable to deposits of less than Rs.1 Cr as on date of booking the deposit.
( II ) For 5 Crore and above deposits, the base rate is the rate applicable for 5 crore deposits.
The base rate applicable is the interest rate of the date of deposit acceptance under tenor for which the deposit has been in force with the bank.
Premature closure of deposit attracts penal charges of 1% as mentioned above, except below scenarios –
- a) Deposit booked with tenor 7-14 days
- b) Single Deposit booked with amount >= 5.25 Cr to < 5.50 Cr (wef 29th Aug 2018)
- c) Single Deposit booked with amount >=24.75 Cr to < 25 Cr (wef 29th Aug 2018)
- d) Single FD booked with value >=25 crore (post Sept 2017)
- e) Customer deceased
- f) NRE fixed deposits.
In case of death of any holder of the deposit prior to maturity date, premature termination of the deposit would be allowed as per the terms of contract subject to necessary verifications and submission of proof of death of the depositor. Such premature withdrawals will not attract any penal charge.
I agree that in case of premature withdrawal of my fixed deposit based on my instructions or the instructions of all the joint depositors in the case of joint deposit, the bank shall have the right to recover interest already paid or the penalty (reduced rate), if any, from the proceeds of the fixed deposit in accordance with prevailing regulations of the bank and the Reserve Bank of India.
I agree that the bank will pay the Fixed Deposit amount either on maturity or premature withdrawal at any branch irrespective of the branch where the deposit is booked.
In case of premature liquidation of the fixed deposit against which the overdraft has been taken, the rate applicable on the overdraft utilized will remain unchanged as per RBI regulations.
Fixed Deposit Liquidation on NetBanking is available only for Single Holding Deposits of Individual Customers.
Central or State Government establishments such as Apex Bodies, Union Government, State Government, Union Territories Government, Legislature, Judiciary, Embassies, Missions, Panchayat, District, Local Body and certain other entities which are 100% owned by Government shall be eligible for exemption from penalty (reduced rate) applicable on premature withdrawal of Fixed deposits for Deposits booked/renewed on or after 1st July’23. Customers who wish to avail this facility on new booking or renewal, are requested to visit nearest Branch prior to new booking or date of renewal of deposit with request letter and requisite documents (if required). For more details, Please contact your Branch/Relationship Manager. Please note this facility will not be available for online booking of FD.
Insurance Cover for Deposits
The deposits in the Bank are insured with DICGC for an amount of Rs 5 lakhs (principal + interest) per depositor
Non Withdrawable Fixed Deposits (Applicable for Resident and Non Resident)
The Deposits cannot be closed by the depositor before expiry of the tenure. However, the Bank may allow premature withdrawal of these deposits in certain exceptional circumstances, in the event of direction from any statutory and / or regulatory body or deceased claim settlement cases.
In the event of premature withdrawal of these deposits under above mentioned exceptional circumstances (except for deceased claim settlement case), the Bank will not pay any interest on the principal amount of the deposit. Any interest credited or paid up to the date of such premature closure will be recovered from the deposit
With effect from July 22nd, 2023, the interest rate applicable for premature withdrawal in the event of death claim, will be the rate on the date of deposit booked, to the period for which deposit remained with the bank and not at the contracted rate.
Prior to July 22nd, 2023, In the event of premature withdrawal of these FDs due to death claim , interest to be paid to the claimant. The interest rate applicable on such withdrawal will be the contracted rate or the base rate applicable for the period the deposit has remained with the bank, whichever is lower. For deposits 2 crore to < 5 crore, the base rate is the rate applicable to deposits of 2 crores as on the date of booking the deposit. For deposits >=5 crore, the base rate is the rate applicable to deposits of 5 crores as on the date of booking the deposit.
Sweep-in facility is not allowed.
The deposit is allowed for Non-Resident Category also. The minimum tenor for NRE deposit is 1 Year.
The minimum tenor for resident and NRO deposits of 2 crores is 1 year and 89 days for 5 crore & above
The deposit will be booked with maturity instruction as ‘Do Not Renew’.
The Non-Withdrawable Deposit is offered for amount 2 crore and above only.
Overdraft Facility /Advances are NOT allowed against Non-withdrawal Fixed Deposit and it continue to remain not eligible for any security collaterals like issuance of Letter of Credit / Bank Guarantee or any other margins etc
A fixed deposit account provides you with a safe investment option, where your funds are secured for a fixed amount of time while you earn a fixed rate of interest on the back of it.
There are different types of fixed deposits such as regular fixed deposits, senior citizen fixed deposits, cumulative or non-cumulative fixed deposits and many more
When you open your new FD account with My Deposit, the minimum amount required for a fixed deposit is ₹25000.
Here are some of the benefits of investing in Fixed deposit: high rate of interest on your investment, instant withdrawal or premature withdrawal benefits, a fully digital application process and much more.
Suppose you compare the interest rates for a general user against the interest rates offered to a senior citizen or woman. In that case, you will notice that the latter group usually gets higher rate of interest.
If your FD amount is more than ₹50,000, then the PAN card is mandatory.
There are no fixed eligibility criteria for opening a fixed deposit account at My Deposit. Anyone who is an Indian citizen and has all the documents required can invest.
The ideal tenure for your fixed deposit can differ between banking partners. The general tenure usually varies from 30 days to 10 years.
My Deposit offers special fixed deposit schemes for senior citizens, with interest rates up to 10.2%.
It is a different type of investment scheme where you keep on adding funds over the original FD. The interest is applied to your original investment amount, and then in the following cycle, you will get the benefit of the increased principal amount
Under Section 80C of the Income Tax Act of 1961, you can get a tax benefit of up to ₹1,50,000 for investing in a fixed deposit.
Yes, My Deposit offers pre-mature withdrawal benefits with its fixed deposit, available after 30 days of investing.
If you have made an FD investment with a tenure of less than 6 months, then your investment will be considered under simple interest. However, if it is above ₹50,000, you will get the benefit of compound interest.
Sweep-in is a form of fixed deposit where you can transfer the excess funds from your savings account to the FD account. A sweep-out facility is the exact opposite, where the deficit in your savings account is covered by transferring funds from the FD account.
Once your FD account has matured there are two options that you can choose from: renew your FD once again or transfer the entire amount back to your savings account.