Recently, the Reserve Bank of India (RBI) allowed banks to offer differential interest rates based on their term deposits.
Axis Bank is the first to set a trend to set differential interest rates for its customers without premature withdrawal facility.
This special fixed deposit will allow individuals to fetch higher interest rates compared to other fixed deposits. This facility is also available for NRI customers.
Unique Features & Benefits:
- Minimum amount to open a Fixed Deposit+ account is Rs.15,00,001
- Auto renewal will not be available under this deposit scheme
- Fixed Deposit+ Term Deposits (Retail & Corporate) cannot be closed prior to date of maturity.
- Premature withdrawal is not permissible under this scheme except for exception cases which include bankruptcy/winding up / directions by court/regulators/receiver/liquidator / deceased cases.
- Premature Closure arising out of afore mentioned scenarios in the above cases will result in the change of applicable interest rate from the Fixed Deposit plus rate to that of Normal Fixed Deposit rate (as per the prevailing rate) and will include application of penalty.
- Premature Penalty will not be levied in cases where closure request has not been initiated by the depositor
- One can choose the tenure between 1 year to 2 years.
- There is option to choose from simple and compound interest method.
Types of deposits offered are
- Short Term Deposits,
- Reinvestment Deposit,
- Monthly and Quarterly Payout deposits
How is interest rate calculated on Fixed deposit Plus?
Interest is calculated on a quarterly basis for Fixed deposits with tenure of 6 months & above.
Interest earned during the previous quarter is added to the Principal for calculation of interest. Fixed deposit interest rate on this amount is calculated every quarter.
For fixed deposits schemes with tenure of below 6 months, interest is calculated at Simple Interest. Please note that the period of Fixed Deposit is considered in number of days.
In the event the depositor chooses to receive the periodic interest payments on a quarterly basis, interested is calculated and paid on quarterly rests.
The FD rate applicable for a monthly interest option will be discounted rate over the standard rate.
TDS on Fixed Deposits
Tax Deducted at source is applicable to individuals rates and respect of interest earned on fixed deposits
Tax at source is deducted as per the Income Tax regulations prevalent from time to time
Thus, if the total projected interest in a financial year crosses the threshold limit which is presently Rs 10,000.