A fixed deposit receipt is a document that is given to the depositor as proof of their ownership of the FD. Generally, the FD receipt is directly given by the bank or the company where you have your FD account.
Components of a Fixed Deposit Receipt
Fixed deposits are traditional investment schemes generally offering consistent and high return rates. Whenever you purchase an FD, the bank/company will send you a fixed deposit receipt. This is an important document that is really useful in proving your ownership of the FD. It should have the following components:
Rate of Interest on the Fixed Deposit
One of the main components to look for in a receipt is the interest rate. It should always be cross-checked. This component remains fixed for the decided tenure of the FD but is liable to change. The interest rate on FDs also varies from bank to bank and is based on the scheme being offered. Hence, the rate mentioned on an ICICI bank fixed deposit receipt, Bank of Baroda FD receipt, a Canara Bank Fixed Deposit Receipt, and an HDFC FD Receipt can differ.
Scheme Maturity and Auto Renewals
Most people invest in FDs to reach a financial goal such as buying a car or paying for education. This means that they generally want to access the fund at a designated time. Hence, it is vital to invest in an FD based on the maturity date. In case one needs to access the funds at an earlier date, the FD needs to be withdrawn prematurely. So, you will lose interest and receive a lesser amount than originally planned. This maturity date should be checked on the receipt.
Another important component is the auto-renewal option provided by certain banks and companies. Enabling this option ensures that your FD gets renewed automatically at a given date. In case you want to stop the auto-renewal option, you need to notify the bank/concerned authorities before the FD maturity date. Auto renewal or closure details are mentioned on the receipt.
Charges on the FD
In case the depositor wants to withdraw the FD before the maturity date or a certain time period, they might need to pay a penalty. As a rule, this fee is stated on the fixed deposit receipt and varies from bank to bank. You should choose the maturity date in accordance with your goal to avoid paying any extra fees.
In the event that the depositor passes away, the total FD amount (i.e. the principal and the interest) is passed on to the nominee. Since an FD is an excellent means of investment, it is important to recheck whether the correct name is mentioned or not.
There are two types of FD deposits and this detail should be mentioned on the FD:
- Cumulative FDs – The interest of the FDs will keep on getting added to the principal amount, as per the chosen FD duration. Hence, the depositor receives the total amount when the FD matures.
- Non-Cumulative FDs – If you do not want to receive the total amount after maturity, you can opt for this deposit type. Here, the FD interest is paid out at regular intervals and acts as a source of income.
The main motive for investing in an FD is to receive more money than the original investment. Hence, both the total maturity amount and the interest amount that the depositor will receive are part of the fixed deposit receipt format.
Why is a Fixed Deposit Receipt Important?
Generally, a fixed deposit receipt format is important to verify the ownership of the FD. But when does one need to prove that an FD belongs to them? Well, a few different cases are mentioned below:-
- When the FD is withdrawn before maturity – If the depositor needs to collect the funds before the FD matures, the bank will ask for proof of ownership. This is when they need to produce the fixed deposit receipt.
- When the FD needs to be renewed – The process of online renewal for an FD is simple, but in the case of offline renewal, you’ll be asked to produce the FD receipt. Once the existing FD is renewed for a fixed duration, a new fixed deposit receipt will be generated and given to you.
- To take a loan against an FD – In case you cannot give the collateral of a loan, you can keep your FD to convert it into a secured loan. This means that the loan now becomes secured and you’ll be able to enjoy lower interest rates.
What are the key features of a Fixed Deposit Receipt?
A fixed deposit receipt is highly important when claiming the maturity amount. Some common features are:
- Consists of important FD details like information of the depositor, FD component details, maturity amount, date of maturity, penalties and charges, nominee details, and much more
- Can be kept as collateral for loans
- New receipts are generated on the renewal of FDs
- A fixed deposit with a term of more than five years can receive tax benefits
- Contains information about tax deductions (if any) and tax-saving declarations
- Can be verified at the bank’s nearest branch
- Depositors can easily apply for duplicate FD receipts in case they lose a copy
Things to Check in Your Fixed Deposit Receipt
Generally, an FDR contains all relevant details about the investment scheme offered by the bank. Some common things that you should always check in your fixed deposit receipt format are:
- Deposit Term
Check the overall investment tenure of the FD scheme you choose.
- Rate of Interest
Although this might seem obvious, it is one of the most important things that a fixed deposit receipt contains.
- Maturity Date
It is highly important to check the maturity date if you want to use the money for some goal/purpose.
- Pre-Maturity Withdrawal Penalty
Although one shouldn’t withdraw their FD before maturity, it is better to be safe and know about the penalty charges (if any).
It is best to check the nominee details to ensure that the FD proceeds go to the right person.