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FD Eligibility Criteria and Documents Required

by Hunny Jaswal - 13 Oct 2022, Thursday 33 Views Like (0)
FD Eligibility Criteria and Documents Required

Investing in a fixed deposit is one of the safest and most reliable methods of saving money that offers you a consistent return regardless of the market conditions at the time. Fixed deposits are the most trusted way to save and get assured returns when saving money. 

To open a fixed deposit with any bank, you will need to submit a checklist of documents regardless of the method you choose. By using an online FD interest calculator, you can calculate your maturity amount before investing in a Fixed Deposit scheme.

Fixed Deposit Eligibility & Documents

It is important to note that you need to be over 18 years old to open an FD, and you also need to be a citizen of India. Besides partnership firms, companies, unincorporated associations, Hindu Undivided Families, and trusts and foundations are some entities that can open FDs in India. In addition, a new or existing bank customer can open a fixed deposit account. In addition to individuals, many types of fixed deposits exist, including fixed deposits account for public/private limited companies, partnerships firms, statutory boards, registered societies, trusts and local authorities. 

Listed below are the documents required to open an FD account

FD account for Existing Customers

You do not need to bring all the necessary documents when you want to open an FD with your existing bank account, as your bank will already have them if you want to open an FD. However, to complete your KYC, you will be required to bring a copy of your latest passport-sized photograph and a copy of your KYC.

FD account for new customers

  • Passport-size photos
  • Documents required for KYC verification include a PAN card, AADHAR card, driving license, voter identification card, and passport.

FD account for Public/Private Limited Companies

  • PAN card of the company
  • Authorized signatories' KYC
  • Passport Size Photographs 
  • Certificates of incorporation or registration
  • Statement of bank account, telephone bill, and electricity bill
  • Resolution for the opening of the FD by the board

FD account for Partnership firm

  • PAN card
  • Partnership deed
  • Passport size photo
  • Registration certificate
  • KYC with authorized signatories

Registered Societies

  • Opening of FD accounts by board resolution
  • All authorized signatories need to do KYC
  • The certificate of incorporation or registration of the company
  • Statements of bank accounts, electricity bills and telephone bills from the most recent month
  • Passport size photo 
  • PAN card

FD account for Statutory Board

  • PAN card
  • Statement of bank account, electricity bill and telephone bill,
  • Obtain a copy of the permission given by the government authority/ministry
  • Incorporation/registration certificate
  • All authorized signatories must complete a KYC procedure
  • Take passport-size photos

Features and Benefits of Fixed Deposits

To open an FD, you must invest a lump sum of money for a fixed period. Your choice is whether you want to receive the interest earned on the deposit periodically or only when the deposit matures. However, there are several advantages and features to fixed deposit that you should be aware of

  • Assured Returns

There is always a guarantee of return on investment with any FD scheme. Once the deposit matures, you will receive the principal amount you invested and the interest earned. In addition, you will not be affected by market fluctuations, and any revisions to the interest rates will only be made after the maturity of the deposit or when it is renewed.

  • Interest Rates

Many factors affect interest rates of Fixed Deposit, including the deposit's tenure and the financial institution where you invest.

  • Flexible Tenure

You can choose from various tenures from 7 days to 10 years as a client. During this term, you can always withdraw or close your deposit account. However, a penalty fee will be if you withdraw your deposit too early.

  • Returns on Investment

Depending on how long it takes for an FD to mature, you will earn different kinds of interest on it. If the deposit is held for a longer period, the interest rate on the deposit will be higher. There is also the option of a non-cumulative FD, wherein you will receive the interest amount periodically rather than all at once.

  • Loan against an FD

If there is an emergency, you would be able to apply for a loan against your FD if you have a unique feature of an FD. However, you may be able to borrow up to 90% of your investment. It is also important to remember that if you have applied for a loan, the FD amount cannot be withdrawn