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11 facts about Term Deposit Receipt(RD)

1) What's TDR ?

TDR stands for Term Deposit Receipt.

TDR is a type of Fixed Deposit where you can choose to receive the interest either Monthly or Quarterly.

This scheme is also known as Interest Payout option. This scheme is suitable for those who expect to receive regular income.

2) How does TDR works?

  • Deposit a lump sum amount for specific tenure

  • Specify whether you want to receive interest monthly or quarterly

  • You will receive interest as per your chosen interest frequency till the end of the tenure

  • At the end of the tenure, you will get your deposit amount back.

3) Features ?

  • Safe investment option

  • Guaranteed returns

  • Regular monthly or quarterly income

  • Senior Citizens get extra interest rate compared to other customers.

4) Income tax benefits ?

  • Deposit amount (up to Rs. 1.5 Lakhs) under 5 years Tax Saving FD will qualify for tax deduction under Section 80C of Income Tax Act

  • No tax deduction benefits for deposit other than 5 years Tax Saving FD

  • There is a TDS (Tax Deducted at Source) from Bank if the interest received is more than Rs. 40,000 in a financial year. This is for ordinary citizens. The new TDS limit of Rs. 40,000 is from 01-Apr-2019 onwards. Earlier, the limit was Rs. 10,000

  • For Senior Citizens, TDS limit is Rs. 50,000 from 01-Apr-2018 onwards. Earlier, the limit was Rs. 10,000

  • Bank will provide TDS certificate for the tax deducted

  • Interest received is taxable. You need to declare the interest income under "Income from other sources" during tax returns and pay the income tax as per your income tax slab.

5) Deposit limits ?

  • Minimum Deposit amount is Rs. 1,000/-

  • No maximum limit on deposit amount.

6) Terms ?

You can choose the Term from 7 days to 10 years.

  • Minimum Term - 7 days

  • Maximum Term - 10 years

Quite a few Banks offer terms up to 20 years.

7)) Interest rates ?

The interest rate (%) varies from one Bank to another Bank. Kindly check with your Bank for the latest interest rate.

8) Premature closure ?

  • Premature closure of Term Deposit is possible. However, there will be penalty for doing so

  • The penalty amount is generally 1% of the interest earned

  • Interest will be payable for the duration for which the TDR was kept minus the penalty amount

  • The penalty amount may change from time to time.

9) Loan facilities ?
Loan facility is available up to 90% of the deposit amount.
10)Account transfer ?
TDR accounts can be transferred from one branch to another branch free of cost.
11)Nominee facility ?

  • Nomination facility is available

  • You can nominate either at the time of account opening or after opening the account (but before maturity).

11) NRI ?
NRI (Non Resident Indians) can not open residential fixed deposits. But, they can open NRI fixed deposits and it is a different scheme altogether.
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