Introduction
Fixed Deposits (FD) are a popular investment option in India as they provide a fixed return to the investors, allowing them to grow their money in a safe and stable manner. The fixed return is paid in the form of interest, which is typically higher than that of a savings account. When you invest in an FD, you will be given a receipt or an acknowledgement known as a Fixed Deposit Receipt (FDR). This article explains the components, uses, and importance of an FDR.
What is a Fixed Deposit Receipt (FDR)?
When you shop, you receive an invoice that contains all the necessary details of your order. Similarly, when you invest in an FD, the financial institution gives a receipt known as an FDR or Fixed Deposit Receipt. This contains all the necessary information regarding your investment, such as deposit amount, interest rate, and maturity date.
An FDR acts as proof that you have invested in an FD for a certain tenure to earn a fixed return, which can be used for filing taxes or claiming benefits. Moreover, it can also help in tracking your investments and in carrying out certain transactions relating to your FD, such as premature withdrawals or loans.
Contents of FDR
An FDR usually contains the following components.
- Account holder’s details: All basic details, including name, age, customer ID, and bank account number of the account holder, will be present on the FDR.
- Deposit amount: The amount you invest in the FD will reflect in the FDR.
- Deposit type: There are several different types of FDs, namely cumulative, non-cumulative, tax saving, etc. The information regarding the type of deposit you choose will be present in the FDR.
- Interest rate and Tenure: Based on the tenure you choose, the bank will decide the interest rate. The tenure and interest rate will be printed on the FDR.
- Maturity date: The date on which the FD matures will also be present on the FDR.
- Maturity amount: The amount you are entitled to receive upon the completion of the tenure is the maturity amount.
- Auto-renewal details: In case you want to renew your FD, then the time of auto-renewal will be mentioned on the FDR, and you must get your FD renewed at that time.
- Premature charges: FDs can be withdrawn prematurely with a penalty. The details of the penalty can be found on the FDR.
- Nominee details: In case you appoint a nominee to your FD account, the name and other details of the nominee will appear on the FDR.
- Important scheme related details: Other details, such as instructions regarding loans against FD and other terms and conditions, will be present.
Importance of a FDR
An FDR is an important document that serves multiple purposes, as mentioned below.
- Proof of investment: An FDR acts as tangible proof of your investment with the bank and comes in handy when you need proof for the purpose of loan applications. Moreover, it also acts as a bond between the bank and the investor and offers safety.
- During premature withdrawal: If you want to prematurely withdraw your FD to meet an unexpected emergency expense, then the bank will ask you to hand over your FDR to close your FD account.
- To avail a loan against FD: Banks allow you to avail a loan against your FD investment when you are facing a cash crunch. During such times, the FD acts as collateral to your loan, and the bank will ask for your FDR as proof.
- Account renewal: If you wish to renew your FD for the same tenure, then you will have to present the FDR to the bank to get a new FDR with updated tenure, interest rate, and maturity date.
- Estate planning: In case of your sudden and unexpected demise, your legal heir or beneficiary can use the FDR to get the maturity proceeds.
- Recordkeeping: In case you have multiple FDs with different banks, an FDR will help you keep a record of all the FDs and track your investments without much hassle.
Things to Check in an FDR
The following are the things to check in a Fixed Deposit Receipt:
- Deposit Term: You must check the tenure or investment period of your fixed deposit.
- Rate of Interest: You must check the interest rate on your fixed deposit. Also, if you are renewing your old fixed deposit, it is important to check the new interest rate. As many times, banks discontinue the old FD and the rate of interest changes. Also, checking the interest rate on the FDR becomes more important when you opt for quarterly or regular interest payouts. In case of any discrepancies, immediately consult with the banker.
- Maturity Date: Double-check the maturity date, especially if you are planning to utilize the deposit amount for a specific purpose, like gifting on a particular occasion. For example, if you plan to gift the FD amount to any of your family members on their birthday, it is good to double-check the date of maturity of the FD.
- Auto-Renewal: You can check the auto renewal option in the FDR. If you have opted for auto-renewal, you can find that information in the fixed deposit receipt. In case of any discrepancies, you can contact the banker.
- Premature Withdrawal Penalty: Penalty details for the said fixed deposit will be mentioned in the receipt. For example, suppose the receipt mentions a 1% penalty. To elaborate, say, you start a fixed deposit for 5 years, and in the 3rd year, due to an urgent requirement, you decide to break your FD. In that case, the banker will pay 1% less than the applicable interest rate for your deposit.
- Nomination: Verify your nominee details for the fixed deposit. Nomination is important to settle the FD in case of any unexpected incidences. In any unfortunate event to the depositor, the nominee will be eligible to receive the fixed deposit proceeds.
- TDS Declarations: The bank deducts tax at source if the interest income exceeds INR 40,000 (INR 50,000 for senior citizens) in a financial year. No TDS is cut for interest income below INR 40,000. Depositors falling under the ‘No Income Tax’ bracket must submit Form 15G or Form 15H as applicable. It’s crucial to ensure these submissions are recorded with the banker. Additionally, certain banks may specifically mention these submissions in the FDRs.
Conclusion
As FDs still remains the most favoured investment avenue in India, it is important to understand the purpose of FDR. It serves as a vital document, encapsulating all essential details of the investment, from the deposit amount to the maturity date. Its significance lies in its utility, acting as proof of investment, facilitating various transactions like premature withdrawal and loan availing, aiding in estate planning, and simplifying recordkeeping.
Ensuring the accuracy of the information contained in the FDR is vital, particularly regarding deposit terms, interest rate, maturity date, auto-renewal option, premature withdrawal penalty, nominee details, and TDS declarations.
Frequently Asked Questions (FAQs)
How do I get the Fixed Deposit Receipt (FDR)?
The bank issues the FD receipt upon successfully opening a fixed deposit account. If the bank fails to provide an FDR, you have the right to request and obtain the FDR from the bank.
How do I download an Fixed Deposit Receipt (FDR) online?
You must log in to the bank portal with your credentials to download the FD receipt online. Upon successful login, select your fixed deposit and provide all the necessary information to download the Fixed Deposit Receipt.
How do I get a duplicate Fixed Deposit Receipt (FDR)?
Typically, to initiate the process of obtaining a duplicate FD certificate receipt, you need to visit the bank branch personally. You need to carry the necessary identification documents and account-related information to obtain a duplicate FDR.
How do you identify a fake Fixed Deposit Receipt (FDR)?
There have been reported instances of generating fake FD receipts in the depositor’s name. To safeguard against such fraudulent activities, it is prudent to verify the receipt at the nearest branch. Alternatively, you can also seek assistance from the bank’s customer care team.
I have lost my Fixed Deposit Receipt (FDR). How can I redeem my FD on maturity?
To redeem your FD, you will need your FDR. In the event of misplacing an FD receipt, you can apply for a duplicate FDR. Typically, this involves submitting a written application containing all pertinent details about the fixed deposit. Some banks may require additional documents to process the duplicate issuance of the FD receipt. The exact procedure may vary from bank to bank. Hence, you must visit the nearest branch or contact customer care for guidance.
What is the difference between Fixed Deposit (FD) and Fixed Deposit Receipt (FDR)?
An FD is a deposit scheme allowing the investment of funds for a fixed duration at a predetermined interest rate. The FDR is an acknowledgement slip provided to deposit holders upon opening an FD account with the bank.