Fixed deposits are a favourable investment option for investors across all age groups. This investment avenue not only safeguards your invested amount, but also helps you earn handsome returns.
When you invest in a fixed deposit, the financial institution provides you with an essential document known as the fixed deposit receipt. This document contains essential information about your fixed deposit account, including your:
The investment tenor
The bank account linked to your fixed deposit
Other relevant details
You need this document to execute various tasks related to your fixed deposit investment. Continue reading to learn more about the fixed deposit receipt, its purpose, and the contents.
What is a Fixed Deposit Receipt?
A fixed deposit receipt is an essential document that a financial institution provides when you open a fixed deposit account. This document serves as a confirmation of your fixed deposit ownership.
It encompasses vital information, including personal details like your name, residence, age, and more. Additionally, it contains details about your fixed deposit investment, such as information related to its auto-closure, auto-renewal and nominee details, among other important information.
The receipt also mentions the type of deposit you have opened, along with its maturity date and compounding frequency. You can also see your interest rate details on this receipt.
Why is a Fixed Deposit Receipt Important?
As mentioned, a fixed deposit receipt is a significant document for performing various activities. Here are a few of them.
1. Necessary for Fixed Deposit Renewal
If you plan on renewing your fixed deposit investment, you may need to provide the fixed deposit receipt as proof. In case you have opened your fixed deposit account in an offline mode, you need to surrender your current receipt for renewal.
When submitting your receipt, you need to provide an instruction to the bank/NBFC to renew it or liquidate your FD. When planning to close your FD account, you must mention the bank account details where your FD maturity amount needs to be credited.
Remember to sign on the reverse side of the FD receipt for the bank/NBFC to follow your instructions. In the case of renewal, the financial institution will provide you with a new receipt containing the renewed investment tenor.
2. Mandatory for Early Withdrawal Request
You also need to provide your fixed deposit receipt if you need to withdraw your fixed deposit funds prematurely. The financial institution may ask you to submit your FD receipt to close your fixed deposit account.
It is essential to provide this document when you plan to withdraw your invested amount before the due date for meeting your financial emergencies. This is because an FD receipt acts as evidence of your ownership.
3. Essential for Obtaining a Loan Against Fixed Deposit
Many financial institutions allow you to obtain a loan against your fixed deposit to address your urgent financial needs. In this case, your fixed deposit serves as collateral against the loan amount you borrow.
Most financial institutions offer up to 90% of the FD amount as a loan. To secure the loan, you must submit your fixed deposit receipt to the financial institution. You will get your receipt back with updated information only after you repay the loan.
The bank marks a lien on your fixed deposit. This simply means that you can utilize the amount only after you repay the loan amount. In the case of any default, the bank recovers the borrowed amount from your fixed deposit.
Particulars of a Fixed Deposit Receipt
Here are the contents of a fixed deposit receipt that you must check.
1. Details of the Account Holder
A fixed deposit receipt holds essential details like your name, residential address, age, and other information. It also includes the bank account number and customer ID a financial institution provides when opening a fixed deposit account.
2. Rate of Interest
An FD receipt also includes the rate of interest that is applicable to your fixed deposit investment. It is essential to check the rates on the document since they can fluctuate based on the repo rate revisions by the RBI.
If you renew your FD, the interest rates after renewal may vary when compared to the existing rates. So, check the FD rate once you receive the FD receipt.
3. Type of Deposit
You have the option to choose between two types of fixed deposits, which are cumulative and non-cumulative fixed deposits. A fixed deposit receipt also includes information about the type of fixed deposit you invested in.
4. Maturity Amount
Another essential component of a fixed deposit receipt is the maturity amount of your fixed deposit investment. It includes the interest amount you will receive at the end of the FD tenor. This information can help you plan your future expenses and investment strategies.
5. Maturity Date
An FD receipt also has your fixed deposit scheme’s maturity date. Checking the maturity date of your investment is essential to help you access your funds at the appropriate time.
6. Penalties and Charges
There are certain penalties or charges associated with your fixed deposits. You may need to pay a penalty if you withdraw your deposit before the maturity date. It also contains other charges besides the early withdrawal fee.
7. Details of the Nominee
You can choose a nominee for your fixed deposit, which is a person who will get the amount and interest earned on your fixed deposit due to any unfortunate event like the death of the holder.
As a result, you must carefully check this information to ensure the details of the nominee are correct.
You can choose to renew your fixed deposit investment upon maturity. The fixed deposit receipt also holds information regarding your renewed fixed deposit.
If you are planning to renew your FD, leverage the benefit of digital tools like the Bajaj Finance FD calculator. This tool will help you get a clear picture of the expected returns and determine the appropriate investment tenor for you. Likewise, most issuers offer FD calculators on their websites, helping you compute your earnings instantly.
As you can see, a fixed deposit receipt holds great significance. It serves as an essential document for various tasks related to your fixed deposit, including the renewal of your fixed deposit upon maturity.
It is imperative to obtain your fixed deposit receipt from the financial institution at the time of opening your fixed deposit account. If you are booking an online FD, you can get the e-receipt and get the physical copy when you visit the branch.