Fixed Deposit Receipt (FDR)

When you purchase clothes from a store, the shopkeeper gives you an invoice or a receipt for the same. This receipt acts as proof of purchase from that store. It contains details about size, return policy, barcode number, etc. Similarly, financial institutions give you an FD receipt to acknowledge that you opened an FD account with them. A Fixed Deposit Receipt (FDR) is a document given to the investor by the bank, NBFC, or Post Office after investing in an FD. It acts as proof of investment in the FD.

Fixed deposit receipts contain various details, such as tenure, interest rate, maturity date, etc. The FDR has all the details of your fixed deposit account and is significant in many aspects.

We will go through each aspect of FDR, such as its components, the purposes it serves, and things to look out for when accepting an FDR.

Name, age, and address of the investor

An FDR will contain your full name and age as mentioned in your Aadhaar or PAN Card. Further, FDR will also state your address based on the identity proof you have provided.

Rate of interest and tenure

The interest rate offered by the financial institution, which may vary depending on the tenure of the fixed deposit and the bank you have chosen, will be mentioned in the FDR. The tenure for which you wish to invest the amount will also be mentioned. You can select the tenure while filling up the application for the fixed deposit.  

Bank account details of the investor

An FDR will contain the investor’s account number and customer ID. Banks, NBFCs, and post offices provide these details after the successful completion of an FD account opening.

Maturity date and value

The maturity date and amount, i.e., the date on which the tenure of the FD ends and the amount you get after maturity, are mentioned in the FDR. Further, the document also states the interest amount you will be receiving.

Auto-renewals

Several financial institutions provide auto-renewal options. You need to check the timeframe within which you can withdraw your deposit after the maturity date. Your FD will renew automatically for the same tenure if you do not withdraw the deposit within the stipulated period. The details regarding auto-renewal are given in the fixed deposit receipt.

Deposit amount and value date

The deposit amount is the investment you made in the FD. The value date is the start date of your FD. These details are also mentioned in the FDR.

Deposit type

There are two deposit types — cumulative and non-cumulative. In a cumulative FD, the interest earned in a given financial year is reinvested and the compounded amount then earns the interest. However, in the case of a non-cumulative deposit, you receive periodic interest payments in your savings account and there is no compounding.

You can choose the deposit type while filling up the application form for the fixed deposit. The type you select will be mentioned in the FDR.

Nomination facility

An investor can nominate a person while opening an FD account. This nominee receives the amount in case of the untimely death of the investor. Every bank, NBFC, and post office provides this nomination facility. The nominee details are to be submitted while filling out the application form for opening an FD account. These nomination details are also mentioned on the FDR.

Penalty charges

If you need funds urgently and opt for premature withdrawal of funds before the maturity date, you may need to pay a penalty. These terms of premature withdrawal and details of the penalty applicable are also mentioned in the FDR.

The fixed deposit receipt format may differ for each organisation, but all the above components will surely be mentioned.

Renewal: If you opted for an offline FD, your bank might ask you to present the FDR while renewing your FD after the maturity date. Moreover, if you want to opt for a different tenure upon maturity, you need to surrender the existing FDR, post which you will be provided with a new one.

Premature withdrawal: In case of an emergency, you may need to withdraw the deposit amount before the maturity date. In such cases, you need to present an FDR to prove ownership. The bank will take the FDR from you and provide the money.

For availing loans: Apart from capital preservation and fixed returns, FDs also offer the option of availing loans against them. Many financial institutions provide loans against FDs at a lower interest rate than usual. For taking a loan against your fixed deposit, you need to submit the FD receipt as per the terms of the financial institution. Once you repay the loan, the FDR will be returned to you with revised details.

There could be mistakes, whether while filling the form or generating the FDR. Therefore, checking that all the details are correctly mentioned on the Fixed Deposit Receipt is crucial. So, do check the following details on your FDR:

Deposit Tenure

The tenure or investment you selected must be mentioned correctly in the FDR.

Rate of Interest

Cross-checking the rate of interest is one of the most important things to do. The rate of interest remains the same throughout the tenure of the fixed deposit (except for some recently launched products by some private banks). However, at the time of renewal, the bank may change the interest rates on FDs. So, make sure whether the rate of interest is the same or has changed.

Maturity Date

You must check the maturity date mentioned in the FDR as it helps you access your deposit at the right time. If you are planning a trip or purchasing a gift for someone with your FD’s maturity amount, knowing the date of maturity will make sure you have funds at the right time.

Auto-Renewal

If you opt for auto-renewal, the details will be mentioned. If not, you must visit the bank on or after the maturity date to renew or withdraw.

Prepayment Penalty

The terms of the prepayment penalty will be mentioned on FDR. You must check those terms because you may need to withdraw the deposit before the maturity date. Usually, the bank may allow you to withdraw funds at a 1% lesser rate of interest than the predetermined rate. However, the terms regarding penalty vary from bank to bank. NBFCs and post offices have their own terms regarding prepayment penalties. So, you need to check those terms carefully.

Nominee Details

You must check whether the nomination details you mentioned while filling out the FD account opening form are correctly mentioned in the FDR. In case of the unforeseen demise of the investor, the nominee receives the amount.

The FDR in banking is the most critical document for an FD account. Without this half-page document, there is no proof of your investment, and there is no way to withdraw your deposit or avail a loan against the FD. The way a payment receipt acts as proof of purchase after shopping in a clothing store, an FDR acts as a receipt of your deposit in the financial institution. Once you open an FD account with a bank, NBFC, or post office, ensure that you get a fixed deposit receipt with all the details mentioned correctly. You must keep it safe until you close the FD account.