What are fixed deposit receipts? What are its major components?

A receipt is an important document that acts as proof of your transactions. Whether it is payment, fund transfer, or investment, a receipt is a legally accepted document that serves as proof of transaction. When you make a fixed deposit investment, the bank or the financial institution offers you a receipt of the investment mentioning various details about your account and particulars. You need to be aware of the contents of your FD receipt since it acts as proof of your investment. Let us dive into the components of a fixed deposit receipt. 

What is a fixed deposit receipt?
 

A fixed deposit is one of the most popular investment instruments in India as it offers security and guaranteed returns, exactly how most individuals prefer. In these accounts, you need to invest a specific amount in lumpsum for a fixed period of time ranging between 7 days to 10 years. 

After your investment attains maturity, you receive your funds along with the accrued interest. The fixed deposit interest rates are disclosed to you during the application process. If you are looking for an FD with attractive rates, IDFC FIRST Bank offers the industry’s best interest rates on fixed deposit accounts along with flexible tenures as per your requirements. Click here to know more!

After you have made the investment in an FD account, the bank issues a fixed deposit receipt in your name that contains the crucial detail about your fixed deposit investment which includes your name, account number, account opening date, maturity date, and more. 

What are the components of a fixed deposit receipt?
 

As mentioned already, a fixed deposit receipt is proof of your funds deposited in a bank at prevailing interest rates for a specific period. The receipt contains every minute details of your FD investment and here are some contents of your fixed deposit receipt.

· Name, age, and contact details of the investor

· Account number linked to the FD account

· Total deposited account (Principal amount)

· Tenure of the deposit

· Interest rate at which the account is opened

· Looking date and maturity date

· Nominee details

· Declaration by the bank

· Important terms and conditions, scheme-related details

The receipt acts as proof of ownership and hence must be kept secure until the maturity of your fixed deposit.

What is an FDR used for?
 

Along with being the proof of your FD investment, the bank can ask for FDR on several events which include:

· During premature withdrawal
 

To meet urgent fund requirements, you may opt for premature FD withdrawal. The bank may ask for your fixed deposit receipt when closing your account prematurely.

· During account renewal
 

After maturity, you may wish to reinvest your funds for another tenure. While doing so, your bank may ask for the receipt to proceed with reinvesting.  

· To apply for loans against FD
 

During a cash crunch, you can also acquire loans against FDs at low interest rates. Your deposit acts as security against the loan and, the bank may require you to present your fixed deposit receipt.  

Important things to verify in your fixed deposit receipt
 

After obtaining your fixed deposit receipt, you must verify the following details.

· Interest rate and the deposit term
 

Interest rate and deposit tenure are the basic details that you must look for. Verify the details to be the same as promised by the bank during the application. 

· Maturity date
 

The maturity date is always mentioned on your fixed deposit receipt. It is the date on which you would receive your accrued interest. Hence, ensure to verify if the dates are correct or not.

· Penalties and charges
 

Going through the penalties and charges is crucial as you may incur losses if you missed on certain terms and conditions.

· Nominee details
 

In case of any mishap during the investment tenure, the funds are transferred to the nominee’s account. Hence, you should ensure the correct nominee details in the fixed deposit receipt.

Now you must have understood the importance of a fixed deposit receipt while opening an FD account. The bank issues this document as proof of your ownership and you must ensure the correct details on your FD receipt to avoid any hassles later.   

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.