Know the changed Fixed Deposit Rules by RBI and more

Recently RBI has made some drastic alterations in the rules regarding FDs.

 Post this change, if you do not claim your FD  after maturity and the capital stays with the bank, then you may have to endure a  loss of interest on the FD. 

Know how to avoid that, Here's the update!

 Everyone who does fixed deposits should know about these drastic changes that RBI made.

A while ago RBI changed the rules related to FD which have now become effective. 

After the verdict of RBI to heighten the repo rate, a lot of government and non-government banks have also initiated the interest-increasing rates on FD. 

Altered rules on the maturity of FD

RBI has made a lot of modifications to the rules of Fixed Deposit (FD) which state that:

1. After the completion of maturity,if you do not claim the amount for any reason then you will get less interest on it.
2. This interest is going to be equal to the interest received on the savings account.
3. Though presently, banks usually offer more than 5% interest on FDs with a longer tenure of 5 to 10 years.  The interest rates on savings accounts are around 3 per cent to 4 per cent at the moment.

RBI issued orders

1. As per RBI, if the FD matures and the amount is not paid or claimed, then the interest rate on it as per the savings account or the rate of interest fixed on the matured FD, Whichever is less will be given.
2. These recent rules will be initiated on deposits in every commercial bank, small finance bank, cooperative bank, and local regional bank.

What do the rules say: 

For example suppose you have got an FD with 3 years maturity, which has now matured,  but for some reason, you do not withdraw this capital, 

 You are left with two results now. 

1. If the interest on your FD is less than the interest being received on the savings account, then you will keep getting the interest with FD.
2.  If the interest earned on FD is more than the interest earned on the savings account, then you will get the interest on the savings account after maturity.

The Old Rules

Before when an FD matured and you did not withdraw or claim it, then the bank would be obligated to extend your FD for the same period for which you had made the FD earlier.

 Though now the tables have turned and it will not happen. If the money is not withdrawn now on maturity, then FD interest will not be available on it. 

It's preferred to withdraw money immediately after maturity.