Interest On FD: With Latest Reserve Bank Of India Rules One Can Get Interest After Bank FD Or Term Deposit Matures Know-How
Interest on FDs: In the banking sector, there is a lot we don't know. Employees in banks do not have the time to explain things elaborately. Even if they do, it takes time for a layman to understand how it works. So, here's an attempt to simplify it.
The interest on a term deposit or fixed deposit usually stops when it reaches maturity. Even though your term deposit is matured, you will continue to receive interest as long as it stays in your savings account until you claim it, according to the new regulations. This was recently mentioned in a circular by the Reserve Bank of India (RBI). As part of a review of Unclaimed Deposits, this was made known.
The Reserve Bank of India has ordered banks to pay interest on term deposits that expire without being renewed. According to a statement, the interest on either a savings account or a mature term deposit, whichever is less, can be utilised to pay that interest.
The decision has to be made since the number of unclaimed bank deposits is growing every year. At the conclusion of the 2019 fiscal year, the company had a cash balance of 18,380 crores. The amount for 2018 will be Rs 14,307 crore.
The RBI will regard a bank account as unclaimed if there has been no activity in it for ten years or longer. Money, fixed or other deposits in a current or savings account are included.
The RBI Depositor Education and Awareness Fund receive this amount from banks every month. The sum for the 2019-20 fiscal year was Rs 33,114 crore. The previous year's figure was Rs 25,747 crore.
This money is put to good use by the RBI, which invests it in items like government bonds. In addition, a special committee has been formed for this purpose. The leftover funds will be used to pay interest on funds transferred to Investor Awareness.