FDs investors will continue to earn interest rates on the amount which remain unclaimed post maturity of fixed deposits (FDs).
RBI has asked banks to pay interest rates applicable to savings account or contracted interest rate, whichever is lower, if an investor does not claim his proceeds post maturity of term deposits i.e. FDs.
In a circular, RBI said, “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.”
With this, even if an investor has not opted for auto renewal facility available with the bank, he will continue to earn interest rates on his unclaimed amount.
Also, banks will now have an option to offer lower rate compared to savings bank account on unclaimed maturity proceeds. However, they need to enter into an agreement with customers at the time of opening FD account.
