You will still get interest after bank FD matures. What the rule says
In a review of unclaimed deposits with banks, the Reserve Bank of India (RBI) on Friday stated that customers can still earn interest after Term Deposit (TD) matures and proceeds are unpaid.
“It has been decided that if a Term Deposit (TD) matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings account or the contracted rate of interest on the matured TD, whichever is lower,” the RBI stated in statement.
Earier, the rule on overdue domestic deposits stated that if a Term Deposit matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings deposits.
The amendment comes as unclaimed deposits with banks have been growing every year. By the end of FY19, the total value of unclaimed deposits soared to around ₹18,380 crore. A year back, the amount was ₹14,307 crore.
RBI classifies a deposit as unclaimed when a customer doesn’t make any transaction in the account for 10 years or more. Unclaimed deposits include such funds in current and savings accounts, fixed deposits, and other deposits (like recurring deposit, pay orders, etc) with banks.
All such money is transferred to RBI’s Depositor Education and Awareness (DEA) Fund every month. In the financial year 2019-20, DEA fund was about ₹33,114 crore. Last year, it was ₹25,747 crore, according to the central bank’s annual report.
The money transferred to the fund by various banks is invested in instruments such as government securities by a committee set up by the RBI. The income thus earned is used for paying interest on the deposits as well as using it for investor awareness and education purposes.
Never miss a story! Stay connected and informed with Mint.
our App Now!!
For all the latest Business News Click Here