The Reserve Bank of India (RBI) has changed the rules for Fixed Deposits (FD) as it said that if a customer has not claimed FD even after maturity, then they will have to bear the loss in terms of interest in savings. The bank further stated that customers can still earn interest after the deposits mature and the proceeds are unpaid. So what does the customer need to do when their FD matures? Immediately claim the deposit after maturity.
“It has been decided that if a Term Deposit (TD) matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract a rate of interest as applicable to a savings account or the contracted rate of interest on the matured TD, whichever is lower,” the RBI stated in a statement.
The Reserve Bank comes with a guideline where it says that this decision will be applicable to all types of banks. These include Commercial Banks, Small Finance Banks, Urban Co-operative Banks, Local Area Banks, State Co-operative Banks and District Central Co-operative Banks.
The development comes at a time when unclaimed deposits with banks have been growing every year. By the end of financial 2019, the total value of unclaimed deposits soared to around ₹18,380 crore. A year back, the amount was ₹14,307 crore.
What are fixed deposits
Fixed deposits are a safe investment option that guarantees consistent interest rates. The highest FD rate is 6.75% p.a. which is given by YES Bank for tenures ranging from 5 years to 10 years for the general public. SBI FD rates range between 2.9% and 5.4% for regular citizens and between 3.4% and 6.2% for senior citizens.
Interest earned from bank fixed deposits is fully taxable for individuals, while senior citizens can claim a deduction of up to ₹50,000 against the interest earned on savings and fixed deposit interest
What are unclaimed deposits
RBI classifies a deposit as unclaimed when a customer doesn’t make any transaction in the account for 10 years or more. Unclaimed deposits include funds in current and savings accounts like fixed deposits, recurring deposits and other deposits with banks. These unclaimed funds are transferred to RBI’s Depositor Education and Awareness (DEA) Fund every month. The money is invested in instruments such as government securities by a committee set up by the RBI.
How to claim your money
As per the RBI regulations, every bank is required to show the details of unclaimed accounts on the bank’s website. After checking the details on the website, you can visit the bank branch with a duly filled claim form, receipts of the deposits and know your customer (KYC) documents to claim the money.