Opening of Deposit Accounts
- All time deposit accounts shall be properly introduced. For all subsequent deposit, a simple Application-cum-Deposit slip is to be filled.
- Period and minimum amount of different types of deposits
- Minimum period:- 7 days
- Maximum period : – 36 months
- The minimum amount accepted for fixed/short deposit is Rs.1,000/-.
Term deposit accounts can be opened with instructions payable to ’Either or Survivor’, payable jointly, payable to any one of the depositors etc. It can also be opened with instructions payable to “Former or Survivor” or “Former, Survivors Jointly or Last Survivor” or “Latter or Survivor” in which case operational/ payment instructions at the time of opening the account or subsequent variations, if any, in these instructions, should be signed by all the joint depositors.
Deposit Account for Minors
- In sole name – if the minor is 10 years and above and can read and write.
- In joint name with natural guardian if minors are less than 10 years of age.
- The maximum amount that can be accepted for deposit in such account is INR.1,00,000/-. However, there is no limit for accepting deposits from minors above the age of 14 years.
Renewal of Deposits
- Duly discharged fixed/short deposit receipt along with request for renewal.
- Where receipts are lodged with the government departments, as security in lieu of earnest money etc. and the concerned authorities are not willing to part with them, amount of the deposit is renewed for a further period.
- Without production of deposit receipt following the procedure detailed hereunder:-
i) Letter of request to be given in prescribed format.
ii) Duplicate receipt will be issued.
iii) Renewal of the deposit will be advised by a registered letter to the
concerned government department, under advice to the depositor.
iv) Fresh receipt is issued.
Deposit Receipt Payment on Due Date
- Deposit receipt/s duly discharged by all the depositors (on revenue stamp in case of cash payment up to 5,000/-) with clear payment instructions is to be given.
- The amount of maturity value in case of deposit under simple interest deposit scheme, and the principal amount along with the residual interest, if any will be paid by:-
- Credit of depositors account with the Bank.
- Credit of depositors account with any other Bank through NEFT / RTGS.
- Issuance of DD / Bankers Cheque as per instruction of the depositor.
Third party/nominee/legal heir payment of deposit
The proceeds of a deposit receipt is not payable to a third party or to a collecting bank unless the receipt is discharged and is accompanied by a separate letter of authority signed by all depositors authorizing payment to the third party or to the Bank, as the case may be.
Nominee vis-à-vis legal heirs
- If on the death of the depositor, both the nominee and the legal heir make their claims simultaneously in respect of the deposit, the bank would take note of the legal heir holding succession certificate.
- However, such legal heirs are advised to bring from the court an injunction restraining the bank from effecting payment to the nominee/s.
- The Bank will get valid discharge by paying the nominee so far as any legal heir has not produced, in the meanwhile, any decree, order, certificate or other authority from a court of competent jurisdiction.
Prematured Deposit Payment
- The deposit receipt duly discharged and the letter of request for prepayment signed by all the depositors are required.
- Normally on prepayment a penalty of 1% below the interest rate ruling on the date of making deposit for the period for which deposit has actually run is deducted.
- Waiver is allowed where –
1. Deposit is renewed for a period not less than unexpired period.
2. Deposit is paid to nominee / legal heirs / claimants in deceased accounts. In this case interest at applicable rates for which deposit has actually run is paid.
Rules regarding payment of interest on time Deposits
- Interest accrued on a time deposit, would ordinarily be paid, only on maturity. However, at the request of the depositor, interest on deposits of -12- months and over, can be paid before maturity on the following basis:-
Monthly, quarterly or half yearly interest on completion of the month/quarter/half year calculated from the date of deposit or end of each calendar month / quarter / half year, whichever is later.
- For calculation of interest on term deposits for periods < 12 months, the following procedure would be adopted –
On deposits for period up to -182- days, the interest is calculated for the actual number of days on the basis of -365- days in a year.
- On deposits for period more than -182- days, the interest is calculated on monthly basis for the completed months and for residual period, on actual number of days.
- Standing Instructions are accepted for credit of periodical interest in case of monthly / quarterly / half yearly interest on deposits to customers Current / Savings Bank account
Higher rate of interest to Senior Citizens
An additional rate of interest @ 0.50% on the Term Deposits (including Recurring Deposits and Term Deposits under other schemes) of senior citizens resident in India who has completed the age of 60 years is paid as per guidelines. Super Sr. Citizen above 75 years, as per our bank’s guidelines.
Procedure in case of lost receipts
a. An application from the depositor is to be given.
b. Applicants must be properly identified.
c. An indemnity bond is to be obtained in the prescribed form in all cases.
d. One or two surety/ies considered good for the amount involved, must
execute the indemnity along with the depositor/s.
Addition on name in Fixed Deposit receipts & Recurring Deposit Accounts
- If the existing depositors makes a request either to add the name of a close relative (his consent should be obtained) the name of one of the existing joint accountholders (he should also sign the letter of request), the same are allowed, as per under mentioned procedure –
- A letter signed by the depositor/all the joint depositors should be given requesting the Bank to add the name of a relative/ friend the name of one of the existing joint depositors. However, a substitution of name is not permitted.
- Fresh account opening form and KYC documents incorporating revised
operational instructions, signed by the following should be obtained:-
- In case of addition, the existing depositor/s and the person whose name is to be added.
- The fact of addition of the name or deletion of the name of one of the joint depositors, will be noted on the relative deposit receipt under authentication along with the date of such addition / deletion.
- Fresh deposit receipt will not be issued.
- In case of demise of one of the depositors, the request for deletion of his name should be in writing supported by the death certificate, signed by all the surviving depositors giving revised operational instructions. If the surviving depositor/s’ request/s to add name/s of relative/s, such request may be acceded to and the additions may be made on the receipts.
- Deletion of name of joint accountholder/s in case of operational instruction – Payable to Former or Survivor, latter or Survivor or Former, Survivors jointly or the Last Survivor is not permitted.
- Mode of repayment of time deposits.
- In terms of Income Tax Act, 1961 as amended, where aggregate amount of all deposits repayable after notice or repayable after a period (i.e. all time deposits including matured time deposits) held by a person singly or jointly with others at a branch of the Bank together with interest to be paid on such deposits (i.e. excluding interest already paid) is Rs. 20,000/- or more, the repayment will be made by means of “A/c Payee” Banker’s Cheque/draft or by crediting the account of such depositor.
- Payment of periodical interest can be made in cash. (subject to RBI guideline & Income Tax act)
Safe Custody of Deposit Receipts
- At the request of depositor/s, accountholders, FDRs / SDRs can be accepted in safe custody by obtaining specific written instructions from all the depositors regarding payment of interest, disposal of proceeds on the due date etc.
- Deduction of Income Tax at source from payment of interest on time deposits (Section 194A of Income Tax Act 1961) (Sec.194A):
- The Income Tax Act has been amended w.e.f. 1st July 1995 and as per provision of the Income Tax, TDS is applicable in case of Time deposits made from 1st July 1995 and onwards.
- The salient provisions of this section are as under-
- Income tax is to be deducted in cases where the total interest paid or credited on all time deposits with a branch in the name of a depositor, whether singly or jointly (as first named person) exceeds `10,000/- in a financial year.
- For this purpose time deposit means deposits repayable on the expiry of a fixed period i.e. Short Deposit, Fixed Deposit.
- Recurring deposit, savings deposit and current deposit are excluded for this purpose.
- Tax is to be deducted either at the time of credit to the account or payment of interest to the depositor whichever is earlier.
- In case the depositor submits following Form before end of June every year, no tax may be deducted.
- Non-corporate customers other than Senior Citizens – Form No.15G along with PAN (w.e.f. 1st April 2010)
- Senior Citizens i.e. individuals of the age of 65 years or more – Form No.15H along with PAN (w.e.f. 1st April 2010)
- w.e.f. 1st April 2010 I.T. Department has made it mandatory to quote Permanent Account No. (PAN) by deductees in all cases where TDS is applicable, failure of which would attract the TDS at a higher rate of 20% (against normal rate of 10%) or normal rate whichever is higher. Further it has also been made compulsory to mention PAN on form No.15G / 15H w.e.f. 1st April 2010.
- Thus, TDS is deducted where total interest exceeds Rs. 10,000/- on all time deposits as under –
For Individuals :
1. Where Form No.15G / 15H along with PAN submitted by the customer – NO TDS. Subject to individual income exempted under Income Tax for that year.
2. Where Form No.15G / 15H without PAN is submitted by the customer – TDS @20%
3. Where PAN is submitted by the customer – TDS @10%
4.TDS is not deducted if the depositor is member of the bank.
(As per provision of Co.Op Act & Income Tax Act).
For others – TDS is deducted @20%
Issue of certificate
A consolidated TDS certificate will be issued at the end of financial year/quarterly.
Treatment of Joint Deposits-
For accepting deposits of senior citizens jointly, with other persons below the age of sixty years, under the special scheme for senior citizens, it should be ensured that the name of the senior citizen is given as the first name in the application.