FREQUENTLY ASKED QUESTIONS
What is a Fixed Deposit?
A fixed deposit account is a form ofinvestmentthat allows customers to grow their savings at a fixed rate for a fixed period of time. Also calledFDs, fixed deposit accountinterest ratesremain unaffected by market volatility. Investors generally invest in FDs for regular returns or as rainy-day fund for unforeseen financial emergencies since FDs offer higher liquidity than most investment options.
What is the minimum deposit amount required for opening a Fixed Deposit scheme?
The minimum amount required to open Fixed Deposit account at the branches is Rs. 10,000 whereas through Bank’s Net and Mobile Banking Services it is Rs. 1,000.
Can a Fixed Deposit scheme be withdrawn partially and what are the applicable premature withdrawal charges?
Yes, the FD investment can be withdrawn partially. The penalty on premature withdrawal would be subject to 'Premature Closure Penalty' as prescribed by the Bank on the date of deposit.
What is the eligibility criterion for availing this deposit for a Senior Citizen?
Customers aged 60 years or above will be eligible for a Senior Citizen’s Fixed Deposit.
What are the benefits of opening a Fixed Deposit account as a Senior Citizen?
Senior Citizens earn additional interest of 0.5% per annum on deposits below ₹10 Crore.
What are the Tax Saver Fixed Deposit features?
This deposit is an FD with a lock-in period of 5 years, without the option of pre-mature withdrawal facility. Customers can avail tax benefits under section 80C of the Income Tax Act, 1961.
What is the maximum amount/limit applicable for availing tax benefits available under Section 80C for Tax Saver Deposits?
An FD investment of up to ₹1,50,000/- booked during the financial year is eligible for exemption under Section 80C.
In case of a joint deposit holding, who can claim tax exemptions under Section 80C of the Income Tax Act?
In the case of joint deposits, the Tax benefit under 80C will be available only to the first holder of the deposit.
Is it mandatory to submit my PAN Card for booking an FD?
If your PAN Card is submitted at the time of opening a Savings Account, it is not required again. However, if you don’t have a PAN, you will have to submit Form 60.
What are the implications of booking this deposit without a PAN card?
If you open Fixed Deposit without a PAN Card, these are the following implications for customers:
1. TDS will be recovered at 20% (as against 10%).
2. NO TDS credit from the Income Tax department.
3. NO TDS certificate will be issued (As per CBDT circular no: 03/11).
4. Form 15G/H and other exemption certificates will be invalid and penal TDS will apply
When will the bank deduct tax on your interest earned?
As per Section 194A of Income Tax Act 1961, TDS shall be deducted at the rate of 10% when interest payable or reinvested on FD & RD per customer, across all Branches, is likely to exceed Rs. 40,000/- (or Rs. 50,000/- for Senior Citizens) in a Financial Year, unless otherwise exempt under law.
As per Section 139AA of the Income tax Act, 1961, it is mandatory to link Permanent Account Number (‘PAN’) with Aadhaar by June 30, 2023. If PAN is not linked, then the PAN provided by the customer will become inoperative. Failure to link will also attract higher TDS rate of 20%, as may be applicable on the income from the Bank. Bank will be unable to refund the TDS once deducted.
Will Tax be deducted from the interest earned or Principal Amount of the FD/s?
TDS / Overhead tax (OHT) will be deducted from the interest paid on the FD/s but if the interest is not sufficient to recover TDS/OHT, the same will be recovered from the principal amount of the FD/s and be paid to the government.
What is a Sweep-In facility?
The Sweep-In facility enables customers to link existing Term Deposit to Savings or Current Accounts held with the bank. In case of an emergency, the shortfall in the account is swept in from the linked Term Deposit in the units of Rs. 1/-, thereby giving customers the convenience of getting payments processed with ease.
Let's take an example to illustrate how the Sweep-In facility works: Mr. Ramesh has availed Sweep-In facility on his existing Term Deposit of ₹50,000/- held with the bank. Let’s assume that on a particular day, the balance in his Savings Account is ₹30,000/-, and he issues a cheque for ₹50,000/- in his account and it has now come for clearing. In this instance the shortfall of ₹20,000 (Account Balance – Obligation Amount issued as a cheque), will be utilized from the linkedFD accountto clear the cheque.
What is a Sweep-Out facility?
The Sweep-Out facility enables customers to earn higher interest on the additional balances maintained in the Savings Account /Current Account by automatically booking the pre-defined amount as aFixed Deposit scheme.
What is the procedure to enable Sweep-In, for deposits that are booked under the Sweep-Out option? (For savings accounts where this option is available)
FD accounts that are booked through Sweep-Out option, the Sweep-In is enabled automatically.
Can the Sweep-In facility be availed for multiple FDs held with the bank?
Yes, the Sweep-In facility can be availed for all or multiple deposits held with the bank, except on Tax Saver Deposit.
In case of enablement of a Sweep-In facility due to shortfall of funds in the savings account, what is the order of deposit breakage for honouring the obligation?
The system will first Sweep-In amount from the deposit that was booked last or recently.
Will both, principal and interest be considered for a Sweep-In facility?
Only the deposit principal amount will be considered for a Sweep-In facility.
Can the Bank deduct TDS on the FD accounts booked?
One of the many Fixed Deposit tax benefits is that the Bank can deduct TDS on the FDs booked. The entity would need to submit either Form 15G OR Certificate of Tax exemption issued under Section 197 of Income Tax Act, 1961. However, PAN would be mandatory. In absence of PAN, Form 15G and other exemption certificates would be invalid & penal TDS would be applicable.
As per Section 139AA of the Income tax Act, 1961, it is mandatory to link Permanent Account Number (‘PAN’) with Aadhaar by June 30, 2023. If PAN is not linked, then the PAN provided by the customer will become inoperative. Failure to link will also attract higher TDS rate of 20%, as may be applicable on the income from the Bank. Bank will be unable to refund the TDS once deducted.
How can I book FDs above ₹2 Crore?
If you would like to open Fixed Deposits with a value of more than or equal to INR 2 Cr, please visit our nearest IDFC FIRST Bank Branch.
How is the interest calculated on an FD scheme?
Interest on deposits are calculated either as simple interest, or compound interest in case of re-investment. You can use our Fixed Deposit interest calculator to understand the returns you might receive.
What are the interest rates in case of pre-mature withdrawal?
The interest rates applicable on Fixed Deposits withdrawn before the maturity date, as stated by the RBI, shall be as under:
1. Interest shall be paid at the rate applicable to the amount and period for which the deposit remained with the bank and not at the contracted rate.
2. No interest shall be paid, where premature withdrawal of deposits take place before completion of the minimum period specified i.e. 7 days.
What are the FD rates on overdue domestic deposits?
If a Fixed Deposit matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings account or the contracted rate of interest on the matured FD, whichever is lower.
How to Choose the Right Fixed Deposit?
Look for the following features in an FD account:
1. Online fixed deposit accounts offer more convenience and flexibility. You can open IDFC FIRST Bank’s FD accounts directly through the IDFC FIRST Bank mobile banking app.
2. Interest rate is a vital criterion for FDs. Choose a high FD interest rate to grow your savings faster.
3. Ensure the FD you choose has flexible tenure options. Select an appropriate FD tenure after analysing your financial requirements well.
4. Read the terms for premature withdrawal and the penalty to be paid in such a case, if applicable.
5. An overdraft facility is essential in FDs. Unsecured loans are generally more expensive in terms of repayment than loans against FDs.
How do I open a Fixed Deposit Account online?
If you have a current or savings account with us, here is the two-step process to open an FD account online with IDFC FIRST Bank:
1.On the IDFC FIRST Bank mobile banking app, go to ‘Deposits’ and click on “Create FD”
2. Select deposit amount of your FD, the tenure and click on “Create FD” to complete the process
Alternatively, you can also open an FD by visiting your nearest IDFC FIRST Bank branch.
Why opt for IDFC FIRST Bank’s Fixed Deposits?
1. Easily accessible online through IDFC’s mobile app
2. High interest rate
3. Interest payout options
4. Special benefits for senior citizens
5. Flexible tenures
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