TERM DEPOSIT INVESTMENT ACCOUNT - IMPORTANT POINTS
Essential for All Upcoming Bank Exams
The minimum maturity period of a term deposit can be 7 days (as per RBI Policy dated 26th October, 2004) irrespective of the amount of the deposit. Normally the maximum period would be restricted to 10 years.
Additional/ Deletion/ Substitution:
All original names cannot be deleted. At least one of them should continue to be the deposit holder. All account holders should make a written request. Fresh nomination must be obtained on any of the above changes. In case of deposit in the name of minors or which are under any kind of charge, no change to be allowed.
Split up to deposits:
Banks can also allow the joint accounts to be split up in their individual names provided the period and aggregate amount of deposit do not change. This would not be considered premature payment.
Banks can allow overdue interest id deposit is renewed form date of maturity (fully or partly), till some future date, at the rate operative on the date of maturity of such overdue deposit, where the overdue period is not more than 14 days. It shall be payable only on the amount so renewed. Where the overdue period exceeds 14 days, it can be renewed from the date of application and overdue interest paid separately at rate decided by the bank concerned.
Rate of Interest:
Rates on term deposits schemes are same for all categories except for certain discretion given taking into account the quantum of deposits known as Differential Rate of Interest. Banks can allow either fixed deposit rate or floating rate of interest. Banks can also formulate schemes means for senior citizens (60 years or above) and pay higher interest rate.
FDRs against local instruments:
Interest can be paid from the date, the bank received credit in its accounts with RBI/ SBI in clearing.
Conversion of Term Deposit, Daily Deposit or Recurring Deposit for reinvestment:
The bank should pay interest in respect of such a term deposit without reducing the interest by way of penalty provided that the deposit remains with the bank after reinvestment for a period longer than the remaining period of the original contract.
Payment to legal heirs on case of decreased depositor:
If on request from legal heir/s a bank agrees to split the mount or term of term deposits and issues two or more receipts individually in their name. It shall not be connected a pre-mature withdrawal, provided the period and aggregate amount do not change.
It can be allowed, by paying interest at the same rate or 1% less than the interest rate payable for the period deposit remained with the bank on 9th May, 1998. For decreased accounts, no penalty is to be recovered.
Periodicity of Payment of Interest:
Banks can pay interest on Rupee term deposits at intervals shorter than quarterly intervals (RBI 29th November, 2013).
Loan against term deposit:
Loan wherever allowed to be given, would be subject to levy of normal rate, of the term deposit is got cancelled before completion of period of 15 days.
Margin on Loan:
Discretion of banks.