Deposit FAQS:

Can banks accept interest free deposits?

        Banks cannot accept interest free deposits other than in current account.

Can banks pay interest on savings bank accounts quarterly?

Banks can pay interest on savings bank accounts at quarterly or longer rests.

Can banks pay interest on term deposits monthly?

Interest on term deposits is payable at monthly or longer rests.

Can banks pay differential rates of interest on deposits aggregating Rs.15 lacs and above?

Differential rates of interest can be paid on single deposit of Rs.15 lacs and above and not on the aggregate of individual deposits where such total exceeds Rs.15 lacs

Can banks prematurely repay the term deposit on their own?

The term deposit is a contract between the bank and the customer for a definite term and it cannot be paid prematurely at banks option. Term deposit can be paid prematurely at the request of the customer.

How and when are banks required to pay interest on the deposits maturing on holiday/non-business working day/Sunday?

Banks should pay interest at the originally contracted rate on the deposit amount for the holiday/Sunday/Non-business working day intervening between the date of expiry of the specified term of the deposit and the date of payment of the proceeds of the deposits on the succeeding working day.

Can banks refuse premature withdrawal of term deposits?

Banks cannot refuse premature withdrawal of term deposits.

Can banks levy penalty for premature withdrawal?

Banks have freedom to determine their own penal rates of interest for premature withdrawal of term deposits.

Can banks pay additional interest admissible to banks staff on the deposit placed in the name of minor child/children of the deceased member of staff?

No. Children (including minor) are not eligible for additional interest admissible to banks staff member/retired staff member.

Can additional interest admissible to banks staff can be paid on the compensation awarded by the court to minor child and deposited in the joint name of minor child and parent?

No. As the money belongs to the minor child and not the banks staff, additional interest cannot be paid.

Can banks open savings bank accounts in the name of Government Departments/Government Scheme?

Savings bank account cannot be opened in the name of Government Department/ Government Scheme, excepting in respect of deposits of some Government organizations / agencies for e.g. APMC’S, DPAP, Khadi and village Industries Boards.

At what rate is the interest payable on the deposit standing in the name of deceased depositor?

In case of a term deposit standing in the name of a deceased depositor, interest will be paid in the following manner; If the payment of deposit is claimed before the maturity, the interest is payable at the rate prevalent on the date on which the deposit was placed with the bank and as applicable to the period for which the deposit remained with the bank, without charging any penalty. If the payment of deposit is claimed after the date of maturity, the interest is payable at the contracted rate up to the date of maturity. From the date of maturity till the date of payment of the deposit, the bank shall pay interest at saving rate of interest prevailing on the date of maturity as applicable to the period for which the deposit remained with the bank from the date of maturity of the deposit till its payment.