Term deposits, also known as time deposits, are investment deposits made for a predetermined period of time, ranging from a few days to 1 year. The depositor receives a predetermined rate of interest on the term deposit over the specified time period. Term Deposits are ideal for investors who are willing to give up liquidity in exchange for earning a higher interest rate than that available on an ordinary savings account. Term deposits offer guaranteed returns at low risk. Funds cannot be withdrawn before a specified period of time in fixed deposit and if pre-mature withdrawal is made then a penalty fee will have to be paid. But in case of term deposits of up to Rs.500000, no such thing applies and in case of term deposits above Rs.500000 a prepayment penalty will be there. Features of term deposits

• The aim of these deposits is to inculcate the habit of savings amongst people.
• These deposits are available for a minimum of 7 days and maximum for a year
• Term deposits offer higher interest rate as compared to savings bank account
• The interest available on these deposits is fixed for the entire tenure of the deposit
• These deposits offer low rate of return as compared to equity market
• Fixed deposits offer little protection against inflation in that the deposit amount at maturity may not be substantial when adjusted for inflation
• Most leading banks offer higher interest rates on term deposits for senior citizens
• Loan facility is available for up to 90% of the principal deposit.

How do term deposits work? All term deposits have a fixed rate of interest with a fixed timeframe. For example, a product may offer a fixed rate of 6% per annum over a fixed period of five years. The end of the fixed term is known as the maturity date and this is when the funds can be released from the deposit. The way that interest is paid on term deposits can vary slightly between banks, however generally interest will be paid upon maturity for term deposits of twelve months or less, and annually for term deposits with a term or more than twelve months. You can generally withdraw your money prior to the maturity date, however, there will often be penalties for doing so. Commonly by withdrawing early, you will forfeit any interest that has been earned on the deposit. Deposit amount Minimum Amount:

•  Rs.10,000/-in Metro and Urban Branches and
•  Rs.5000/- in Rural and Semi-urban Branches
•  For senior citizens, the minimum deposit amount is Rs5000/-
• Minimum amount per single deposit for a period of 7 days to 14 days is Rs. 1 Lac.

Maximum Amount:

•  No upper limit applies to the term deposit amount under this scheme

Pre-mature withdrawals Pre-mature withdrawal of term deposit amount is permissible and does not attract any pre-closure fee. The interest applicable to those number of days for which the deposit was with the bank is paid out at a rate applicable during the period of deposit. Interest

• Payment of interest on Monthly/Quarterly/Calendar quarter basis as per your requirement.
• Payment of Monthly interest will be at a discounted rate. Interest will be paid at the contracted rate irrespective of change in the rates thereafter.
• Senior Citizens get 0.25% extra interest rate for amount above Rs 10,000/

Eligibility Criteria People who meet the following criteria are eligible to apply: KYC Documents need to be submitted by applicants who wish to avail the short-term fixed deposit account Documents required to open this account

• Proof of residence
• Proof of identification
• Recent passport-sized photograph of the applicant

Any of the following people or groups may apply for this short-term deposit scheme

• Individual — Single Accounts
• Two or more individuals — Joint Accounts
• Sole Proprietary Concerns
• Limited Companies
• Associations, Clubs, Societies, etc.,
• Trusts
• Partnership Firms
• Illiterate Persons
• Blind Persons
• Minors
• Joint Hindu Families (HUFs)
• Municipalities
• Government and Quasi-Government Bodies
• Panchayats
• Religious Institutions
• Educational Institutions (including Universities)
• Charitable Institutions