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What Is The Difference Between Term Deposits And Time Deposits In India?


A term deposit and a time deposit are often used interchangeably. In fact, demand deposits, term deposits, time deposits are all terms that are used very frequently when you open a fixed deposit.


What Is The Difference Between Term Deposits And Time Deposits In India?
However, in some cases there maybe some difference between both, while in other cases there maybe no difference between both.

Let us see the difference between a term deposit and a time deposit

Term deposits is a very generic term used for fixed deposits. It is a deposit which is placed and can be withdrawn over a specific period of time. The same also hold true for time deposits. However, time deposits are more used when you want to place more of a short term deposit like a few days.

For example, the very word "term" signifies more of a long term nature thing. Therefore, while time deposits are used to signify deposits more for the short term, term deposits more or less signify a more short term deposit.

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This could be for a few days like 15 days, 20 days, 45 days and so on. Globally, there is a practice of giving notice to withdraw a time deposit. In India you can withdraw all of your deposits held at a bank without any notice as such. This is applicable especially for individuals.

Taxation in case of term deposits and time deposits

While there maybe a difference in the term deposit and time deposit in terms of tenure, the other aspects are all unlikely to change. For example, the taxation on these deposits will remain the same. For example, a TDS would be deducted on a time deposit if the amount crosses Rs 10,000 in interest, the same would also apply for a term deposit.


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Both the interest income would have to be added to the total income for the purpose of computing tax. On the other hand you can either submit form 15g or 15h, as the case maybe, if you do not want TDS to be deducted in the case of time and term deposits.


There is not too much of a difference between both and as mentioned earlier, and they are freely used interchangeable in India. Bbut, you seldom hear the word time deposit being frequently used in India. In fact, individuals more often here the word fixed deposit. Bankers tend to call them more like term deposits.

In India the word time deposit is hardly used and the practice of using the word is more outside of India.

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