Fixed Deposits

The features of a Tax Saving FD are:

1. Investment Amount: Maximum Rs. 1.5 Lacs (in a Financial Year)
2. Tenure: a locked in fixed tenure of 5 Years
3. Benefit: In case of joint deposits, the tax benefit under Section 80C will be available only to the first holder of the deposit
4. Premature redemption not allowed, except in case of death of primary applicant.

The Bank, on request from you, allows withdrawal of a callable Fixed Deposit before completion of the period of the deposit agreed upon at the time of placement of the deposit. This will be subject to penalty as may be applicable at the time of withdrawal.
In such cases, the interest paid will be lower by the Penalty rate (Penal Rate) from the rate prevailing on the date of placement of the deposit for the period for which the deposit remained with the Bank or the contractual rate, whichever is lower. No interest will be paid on premature withdrawals of deposit(s) which has remained with the Bank for less than the minimum period. This minimum period is the one that is pre-decided for each type of FD and communicated at the time of booking the FD.
Current penalty rate for premature withdrawal is 1%.

The Bank provides the TDS certificate to you on quarterly basis or before the following dates:

Following are the implications, if you book a FD without/Inoperative PAN:

• TDS at a higher rate of 20% will be applied on resident FDs with interest income of Rs. 50,000/- (Rs. 1,00,000/- in case of Senior Citizen) or above during the Financial Year
• No TDS credit from the Income Tax department
• No TDS certificate will be issued (As per CBDT circular no:03/11)
• Form 15G/H and other exemption certificates will be invalid

The range of tenure for opening an FD is as below:

1. For domestic / NRO customers: From minimum 7 days to 10 years
2. For NRE customers: From minimum 1 year to 10 years

For Fixed Deposits/ Recurring Deposits, TDS is not applicable on the interest earned up to Rs. 50,000 (1,00,000 for senior citizens) under Section 194A. However, TDS will be applicable if the interest received or likely to be received, during the financial year, exceeds Rs. 50,000. Further, in case of Senior Citizen, TDS will be applicable if the interest received or likely to be received, during the financial year, exceeds Rs. 100,000. All customers other than a company, firm or non-resident, who do not have taxable income, can submit a self-declaration form in the prescribed Form 15G/15H for the purpose of availing TDS exemption under section 194A of the Income Tax Act in accordance with the provisions of section 197A. A fresh Form 15G/15H is required to be submitted for each Financial Year. Form 15G/15H should be submitted at the time of creation of FD or beginning of Financial Year whichever is earlier. Further, fresh Form 15G/H needs to be submitted for all subsequent deposit(s) booked during the Financial Year. Following are the limits for accepting Form 15G/ 15H. In case the limits are breached, Form 15G/ 15H will not be accepted.

• Bank is required to withhold tax at source (TDS) at 20% on interest on fixed deposit.

1. Active Account: You must have an active account with the bank.
2. Account Type: You must be a resident customer.
3. Single Holder Account: The account must be in a single holder’s name.
4. PAN Update: PAN must be updated in your AU Savings Account.

RD works in the following way:

1. You need to choose the tenure (total time period of RD) and the amount you wish to invest every month for booking an RD.
2. A monthly deposit of the chosen amount is made in the RD account every month till the end of the tenure.

On maturity, you will get back the amount you deposited, along with the interest calculated at the rate applicable at the time of opening your account.

• Bank is required to withhold tax at source (TDS) at 20% on interest on recurring deposit.