Understanding Fixed Deposit Receipt (FDR): Meaning, Format, Components

If you’re considering a secure avenue for investment with assured returns, the fixed deposit receipt (FDR) often tops the list. Commonly associated with banks, NBFCs, and Post Offices, this instrument safeguards your principal amount and offers a steady interest, usually ranging between 5% to 6% per annum. While you might not achieve rapid wealth accumulation through FDRs, they are an excellent option for capital protection and stashing emergency funds.

Notably, once you invest in such deposits, institutions like ICICI Bank or SBI furnish you with a specific document termed the “Fixed Deposit Receipt”, sometimes referred to as “Fixed Deposit Advice (FDA)” or “Term Deposit Receipt (TDR).”

This document likened to a savings account’s passbook, authenticates your investment. Whether you’re eyeing a standard fixed deposit receipt format, its PDF version, or details like the FDR number in fixed deposits, it’s vital to understand the essence of this instrument.

What is FDR — Fixed Deposit Receipt?

When you purchase clothes from a store, the shopkeeper gives you an invoice or receipt. This receipt acts as proof of purchase from that store. It contains details about size, return policy, barcode number, etc. Similarly, financial institutions give you an FD receipt to acknowledge that you opened an FD account with them. A Fixed Deposit Receipt (FDR) is a document given to the investor by the bank, NBFC, or Post Office after investing in an FD. It acts as proof of investment in the FD.

Fixed deposit receipts contain various details, such as tenure, interest rate, maturity date, etc. The FDR has all the details of your fixed deposit account and is significant in many aspects.

We will go through each aspect of FDR, such as its components, the purposes it serves, and things to look out for when accepting an FDR.

Also Read: Experience financial growth with unmatched Bajaj Finance FD Rates

Components of a Fixed Deposit Receipt

Name, age, and address of the investor

An FDR will contain your full name and age as mentioned in your Aadhaar or PAN Card. Further, FDR will also state your address based on the identity proof you have provided. 

Rate of interest and tenure

The interest rate offered by the financial institution, which may vary depending on the tenure of the fixed deposit and the bank you have chosen, will be mentioned in the FDR. The tenure for which you wish to invest the amount will also be mentioned. You can select the tenure while filling up the application for the fixed deposit.  

Bank account details of the investor

An FDR will contain the investor’s account number and customer ID. Banks, NBFCs, and post offices provide these details after the successful completion of an FD account opening.

Maturity date and value 

The maturity date and amount, i.e., the date on which the tenure of the FD ends and the amount you get after maturity, are mentioned in the FDR. Further, the document also states the interest amount you will be receiving. 

Auto-renewals

Several financial institutions provide auto-renewal options. You need to check the timeframe within which you can withdraw your deposit after the maturity date. Your FD will renew automatically for the same tenure if you do not withdraw the deposit within the stipulated period. The details regarding auto-renewal are given in the fixed deposit receipt.

Deposit amount and value date

The deposit amount is the investment you made in the FD. The value date is the start date of your FD. These details are also mentioned in the FDR.

Deposit type

There are two deposit types — cumulative and non-cumulative. In a cumulative FD, the interest earned in a given financial year is reinvested and the compounded amount then earns the interest. However, in the case of a non-cumulative deposit, you receive periodic interest payments in your savings account and there is no compounding.

You can choose the deposit type while filling up the application form for the fixed deposit. The type you select will be mentioned in the FDR.

Nomination facility

An investor can nominate a person while opening an FD account. This nominee receives the amount in case of the untimely death of the investor. Every bank, NBFC, and post office provides this nomination facility. The nominee details are to be submitted while filling out the application form for opening an FD account. These nomination details are also mentioned on the FDR.

Penalty charges

If you need funds urgently and opt for premature withdrawal of funds before the maturity date, you may need to pay a penalty. These terms of premature withdrawal and details of the penalty applicable are also mentioned in the FDR.

The fixed deposit receipt format may differ for each organisation, but all the above components will surely be mentioned.

Uses And Importance of FDR 

The Fixed Deposit Receipt (FDR) is not just a document certifying your investment; it plays a pivotal role in various financial scenarios. Here’s a breakdown of its importance and associated uses:

Renewal and its Use:

• Importance: If you initiated an offline FD, the bank typically requires the FDR during renewal post-maturity. To change the tenure upon maturity, surrendering the current FDR is mandatory.
• Use: Facilitates the seamless continuation of your investment, ensuring that the renewed FD is aligned with your current financial objectives.

Premature Withdrawal and its Use:

• Importance: The FDR stands as a testament to ownership for emergencies leading to early withdrawal before the maturity date.
• Use: Enables you to access your funds promptly without unnecessary delays or complications, ensuring liquidity during urgent situations.

Availing Loans and its Use:

• Importance: FDs aren’t just static investments; they can act as collateral. Many institutions offer loans against FDs at preferential interest rates. However, submission of the FD receipt becomes a prerequisite.
• Use: Empowers you to leverage your FD for immediate financial needs, making it a dual-purpose tool—both as an investment and collateral.

Things to Check in your FD Receipt FDR

To err is human. There could be mistakes while filling the form or generating the FDR. Therefore, checking that all the details are correctly mentioned on the Fixed Deposit Receipt is crucial. So, do check the following details on your FDR:

Deposit Tenure

The tenure or investment you selected must be mentioned correctly in the FDR.

Rate of Interest

Cross-checking the rate of interest is one of the most important things to do. The rate of interest remains the same throughout the tenure of the fixed deposit (except for some recently launched products by some private banks). However, at the time of renewal, the bank may change the interest rates on FDs. So, make sure whether the rate of interest is the same or has changed.

Maturity Date

You must check the maturity date mentioned in the FDR as it helps you access your deposit at the right time. If you are planning a trip or purchasing a gift for someone with your FD’s maturity amount, knowing the date of maturity will make sure you have funds at the right time.

Auto-Renewal

If you opt for auto-renewal, the details will be mentioned. If not, you must visit the bank on or after the maturity date to renew or withdraw.

Prepayment Penalty

The terms of the prepayment penalty will be mentioned on FDR. You must check those terms because you may need to withdraw the deposit before the maturity date. Usually, the bank may allow you to withdraw funds at a 1% lesser rate of interest than the predetermined rate. However, the terms regarding penalty vary from bank to bank. NBFCs and post offices have their own terms regarding prepayment penalties. So, you need to check those terms carefully.

Nominee Details

You must check whether the nomination details you mentioned while filling out the FD account opening form are correctly mentioned in the FDR. In case of the unforeseen demise of the investor, the nominee receives the amount.

Final Thoughts

The FDR in banking is the most critical document for an FD account. Without this half-page document, there is no proof of your investment, and there is no way to withdraw your deposit or avail a loan against the FD. The way a payment receipt acts as proof of purchase after shopping in a clothing store, an FDR acts as a receipt of your deposit in the financial institution. Once you open an FD account with a bank, NBFC, or post office, ensure that you get a fixed deposit receipt with all the details mentioned correctly. You must keep it safe until you close the FD account.

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