Any individual or a Hindu undivided family, may invest in bank term deposits with a scheduled bank, in his own/Karta’s name (single holder type) or jointly with another adult/minor individual (joint holder type) on either or survivor basis.
The scheme is also known as Tax Saving Fixed deposit for 5 years.
How to apply?
The investor should apply to the bank, in the prescribed form for Bank Term Deposit Scheme.
Amount of Investment
The investment shall be made for a minimum sum of Rs. 100 or in multiples thereof subject to a maximum of [1,50,000], during a financial year.
The facility of nomination is available on all bank term-deposits, except those made/held by or on behalf of a minor.
Particulars of nominee may be furnished at the time of application or at any time thereafter before maturity.
The rate of interest on bank term deposit scheme shall be fixed by the bank concerned from time to time, and shall be payable monthly/quarterly, or in lumpsum on maturity.
Issue of Deposit Receipt
The bank shall issue a deposit receipt bearing name, address, PAN and signature of the assessee alongwith other specified particulars.
In case interest is payable on maturity, the yearly rate of interest shall also be specified on the receipt.
The term deposit shall mature on expiry of five years from the date of receipt.
The premature encashment is not permitted under bank term deposit scheme.
However, in the event of death of the first holder, the other joint holder may encash the deposit before its maturity, by applying to the branch manager alongwith proof of death of the first holder.
A term-deposit may be transferred form one branch to another of the concerned bank, on an application by the investor.
Transfer of deposit from one bank to another shall not be permitted.