Currently, banks provide untimely withdrawal facility on FDs as much as Rs 15 lakh, which the RBI has now to Rs 1 crore, with speedy impact.
Bank Fixed Deposits: The RBI has elevated the minimal quantity for providing non-callable TDs from Rs 15 lakh to Rs 1 crore
The Reserve Bank of India (RBI) has modified a rule on financial institution mounted deposits (FDs) concerning their untimely withdrawals. Currently, banks provide untimely withdrawal facility on FDs as much as Rs 15 lakh. Now, the central financial institution has elevated this quantity to Rs 1 crore, with speedy impact.
Till now, banks have been allowed to supply home time period deposits (TDs) or mounted deposits (FDs) with out untimely withdrawal possibility, offered that each one TDs accepted from people for an quantity of Rs 15 lakh and beneath shall have a untimely withdrawal facility.
Further, the banks have additionally been permitted to supply differential charges on curiosity on TDs based mostly on the non-callability of deposits (i.e., non-availability of untimely withdrawal possibility) along with tenure and measurement of deposits.
“On a review, it has been decided that the minimum amount for offering non-callable TDs may be increased from rupees fifteen lakh to rupees one crore i.e., all domestic term deposits accepted from individuals for amount of rupees one crore and below shall have premature-withdrawal-facility,” the RBI mentioned in a round dated October 26, 2023.
It mentioned these directions shall even be relevant for non-resident (exterior) rupee (NRE) deposits and bizarre non-resident (NRO) deposits.
This round is relevant to all industrial banks and co-operative banks.
Banks provide two sorts of mounted deposits — callable and non-callable. In callable FDs, untimely withdrawal is allowed; whereas in non-callable FDs, it isn’t permitted.
“Banks shall have the freedom to offer NRE / NRO term deposits without premature withdrawal option, provided that all NRE / NRO term deposits accepted from individuals (held singly or jointly) for amount of rupees one crore and below shall have premature-withdrawal-facility,” it mentioned.
Bank FDs are providing enticing rates of interest now after steady price hikes by the RBI since May 2022. They could elevate it additional after RBI Governor Shaktikanta Das earlier this month mentioned that there’s a scope for additional improve in deposit and mortgage charges because the transmission of financial coverage has not been totally achieved.
Currently, ICICI Bank is providing as much as 7.60 per cent rates of interest on FD, relying upon deposit tenure and depositor’s age. PNB is providing FD charges as much as 7.75 per cent yearly and SBI is giving as much as 7.50 per cent a 12 months. HDFC Bank is providing as much as 7.75 per cent rates of interest.
