17 May 2024 | By INDIE
Fixed Deposits (FDs) are one of the most favoured investment avenues in India. They are cherished for their safety, assured returns, and simplicity while offering individuals a reliable means to nurture their savings over time with complete financial security.
When you opt for a fixed deposit with a reputable institution/bank, you receive a Fixed Deposit Receipt (FDR) - a tangible proof of your deposit and the promise of steady growth. Despite the widespread popularity of FDs, many individuals remain unaware of the significance of Fixed Deposit Receipts or even what they entail.
In this post, we will cover the significance of FDRs in empowering you to unlock the full potential of your savings.
A Fixed Deposit Receipt is a document issued by a bank to an individual who deposits a sum of money in an FD account. This receipt works as evidence of the deposit. It outlines the terms and conditions of the FD, including the deposited amount, the interest rate, the maturity date, and any applicable penalties for premature withdrawal.
Essentially, the FDR encapsulates the contractual agreement between you and the chosen bank, providing a clear record of the investment and ensuring transparency throughout the duration of the FD.
Recommended Read: What are floating-rate fixed deposits?
The Fixed Deposit Receipt issued by a bank serves as a repository of critical information regarding your FD account. This document also acts as a legal confirmation of your investment with the bank, providing tangible proof of your deposit. Moreover, it becomes indispensable for various transactions related to FD in the future.
When your fixed deposit reaches maturity, redeeming it entails surrendering the FDR to the respective bank. You need to initiate this process at least a week before the maturity date. Upon redemption, you receive the principal amount along with the accrued interest earned during the tenure. A smoothly executed redemption process may require the presence of digital signatures of all depositors, if applicable, on FDR. The exact steps involved may vary from one bank to another.
You might already know that you can renew your FD at the time of maturity. At that time, renewing your FD with the bank requires you to fill out a fresh FD Application Form at least 15 days before the maturity date and submit the duly discharged FDR with a requisite revenue stamp. Additionally, you may also get digital renewal options on your bank’s mobile app or Retail Internet Banking (RIB) facility.
In the unfortunate event of misplacing the Fixed Deposit Receipt, the FD account holder must Inform the bank promptly about the loss. The bank will issue a duplicate FDR upon receiving a 'letter of loss of instrument' and an indemnity in the prescribed format. He/she will receive a new FDR upon completing the necessary formalities, including the filling of a ‘lost fixed deposit receipt’ form, ensuring the non-encashment of the original instrument.
● Your Fixed Deposit Receipt serves as tangible evidence of your investment with the bank. Keeping it safe ensures you have documentation to support your financial transactions and queries related to the FD account.
● The FDR plays a crucial role in redeeming your FD upon maturity or renewing it for another term.
● You maintain clarity and assurance regarding the terms and conditions of your investment.
● Losing your FDR can lead to complications and delays in accessing your funds or renewing your FD. By storing it securely, you mitigate the risk of potential loss or theft, safeguarding your financial assets.
● In cases requiring premature withdrawals, presenting your Fixed Deposit Receipt at the bank can make this possible. This streamlined process ensures prompt liquidity during emergencies.
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