Terms and Conditions of Term Deposit

General Definition

A term deposit account is a type of fixed-term investment avenue. Customers can use this account to deposit money into a financial institution, such as a bank, and earn interest on their deposits. This type of investment typically comes with a fixed maturity date, ranging from seven days to 10 years, and the interest rate earned depends on the chosen investment term or tenure. Depending on the type of term deposit, customers may choose to receive the interest payments periodically or at the end of the investment term.


Insurance Cover for Deposits

All bank deposits are covered under the insurance scheme offered by the Deposit Insurance and Credit Guarantee Corporation of India (DICGC), subject to certain limits and conditions. The details of the insurance cover in force will be made available to the depositor.


The DICGC insures all deposits such as savings, fixed, current, recurring, etc., except for the following types of deposits:



Each depositor in a bank is insured up to a maximum of Rs. 5,00,000 (Rupees Five Lakh) for both principal and interest amounts held by them in the same right and same capacity.


The deposits kept in different branches of a bank are aggregated for the purpose of insurance cover, and a maximum amount up to Rupees Five Lakh is paid. For example, if an individual has an account with a principal amount of Rs. 4,95,000 plus accrued interest of Rs. 4,000, the total amount insured by the DICGC would be Rs. 4,99,000. However, if the principal amount in that account was Rs. 5,00,000, the accrued interest would not be insured, not because it was interest, but because it exceeded the insurance limit. In cases where a customer holds multiple accounts (CASA and TD) and the aggregate amount exceeds Rs. 5,00,000, the customer will still be eligible for the insurance limit.


TDS (Tax Deducted at Source)

Interest earned on Term Deposits is subject to TDS as per the prevailing income tax laws. The bank will deduct TDS at the applicable rates if the interest income exceeds the threshold limit specified by the Income Tax Department.



Form 15G/H

Customers who are eligible to submit Form 15G (for individuals below 60 years) or Form 15H (for senior citizens) can do so to avoid TDS on their interest income, provided their total income is below the taxable limit.



Interest Payment

Interest on Term Deposits is paid at the agreed rate and frequency. The interest payment options include:



Type of Term Deposit

1. Fixed Deposit


2. Recurring Deposit



3. Tax Saver


Deposits with a lock-in period of 5 years, eligible for tax benefits under Section 80C of the Income Tax Act.



4. Auto Fixed Deposit (Flexi Fixed Deposit)


A combination of savings and current accounts (CASA), offering flexibility in withdrawals.



5. FD Plus


Non-Callable deposits cannot be closed by the depositor before expiry of the tenure.



Premature Encashment

Premature encashment of Term Deposits is allowed, subject to the bank's policy. A penalty may be applicable for premature withdrawals, and the interest rate may be adjusted accordingly.



Auto Renewal / Maturity Instructions


General Terms and Conditions