All about Deposit Account All you need to know
A deposit account is a savings account, current account or any other type of bank account that allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank’s books, and the resulting balance is recorded as a liability for the bank and represents the amount owed by the bank to the customer. Some banks may charge a fee for this service, while others may pay the customer interest on the funds deposited.
How to Open Deposite Account
- Deposit Accounts can be opened by individuals, partnership firms, private and public limited companies, HUFs/specified associations, societies, trusts etc.
- Formalities/procedures relating to identification and introduction for opening of Deposit Accounts in the name of individuals are same as those mentioned for Savings Bank Account. For deposit accounts of limited companies, partnership firms, societies, trusts etc. the documentation formalities will be made available on request.
- The Bank is required to obtain Permanent Account Number (PAN) of the customer or declaration in Form No. 60 or 61 as per the I.T. Act (vide Section 39A) from the person opening the account.
- Deposit Accounts can be opened for a minimum period of 7 days up to maximum period of 10 years. The minimum/maximum periods are subject to change.
- The rates of interest vary depending on the period of deposit. The rates applicable as on date can be obtained from the branch and is also available at our web site. Interest is payable at quarterly intervals or at the time of maturity. Interest is also payable monthly at discounted rates.
- The Bank issues receipt (Deposit Receipt – TDR) for amounts kept in each fixed deposit account. The TDR can be kept in safe custody of the bank free of charge and a safe custody receipt will be issued.
- Premature closure of Deposit is normally allowed. The rate of interest payable will be the applicable rate (at the time of opening the fixed deposit account) for the period for which the deposit has run less penalty of 1%. The penal provisions for premature closure are subject to change from time to time and may also vary with deposit schemes.
- Loan facility is available up to 90% of the principal amount of Deposit.
- In the absence of specific instructions from the customer, a Term Deposit on maturity is automatically renewed for the same period at the rate of interest prevailing on the date of maturity.
- The maturity proceeds will be credited to the current/savings bank account of the depositor if exceeding Rs.20,000/-.
- Interest on Term Deposits is subject to income tax. Exemptions are allowed under certain conditions as specified under the Income tax Act 1961. The full particulars of tax provisions applicable will be provided on request. Depositors may furnish Form 15H in duplicate to receive interest without tax deduction at source (TDS).
- Form 15H is not acceptable when total interest payable by the Branch to a customer exceeds Rs.50,000/-.
- The Bank issues TDS certificates for the tax deducted.
- The Bank may introduce branded term deposit schemes with options /features more attractive to customers. Some of the above provisions in such deposit schemes may be subject to restrictions.
TYPES OF DEPOSITS ACCOUNTS
- Fixed Deposit – Put your idle money in a fixed deposit and earn attractive returns.
- Fixed Deposit (without premature withdrawal facility) -Additional interest rates on select tenure and amount.
- Recurring Deposit – Save bit-by-bit and watch your money grow.
- Tax Saving FD (Fixed Deposit) – An ideal solution for your investment needs
- Security Deposits- A few Corporates stipulate to their new employees to provide Security Deposit to reduce attrition.