What is a Fixed Deposit receipt? Importance, components & benefits of FD receipt

A Fixed Deposit Receipt (FDR) is a document issued by a bank or financial institution when you open a Fixed Deposit Account. It serves as a record of your investment and displays important information about the Fixed Deposit, such as the deposit amount, interest rate and maturity date. Read on to grasp further insights into Fixed Deposit receipts and their advantages.

Popularity of the Fixed Deposit

Despite the growth of many investment opportunities today, a Fixed Deposit continues to be a favourite among investors. It is perceived as a secure investment as it offers guaranteed returns and higher interest rates than a regular Account.

Today, you can even access a Digital Fixed Deposit, which is an end-to-end digital product. You can opt for an 'auto deposit' where funds are automatically transferred from your Savings Account to the Fixed Deposit when the balance exceeds a pre-determined amount.

Fixed Deposit receipt

After opening a Fixed Deposit, you will receive a receipt with critical information related to your investment. Your bank will hand you a physical receipt or send a digital copy to your email.
This Fixed Deposit receipt plays an important role in your financial wellness journey. It contains all the information related to your investment, such as account holder details, interest rate, and maturity tenure, among other details. It is important to keep this document safe among your financial records.

Key components of FD receipt

1) Account holder details

The receipt will feature your full name, customer ID, and bank account number.

2) Fixed Deposit interest rate

Interest rates keep changing. The is why the interest rate offered on your investment is mentioned. This is to make sure that the interest rate on the day you opened your DS will be the same throughout the tenure of your FD.

3) Maturity date and renewal information

The receipt informs you of the maturity date, as well as the renewal option chosen by you. Access to this information helps you plan your financial operations and avoid premature withdrawals, which result in a loss of interest.

4) Maturity amount

This is the amount you will receive when your investment matures. It includes both the principal and the interest earned. You can plan what to do with this amount in advance — whether to renew it, invest in a different instrument, or spend it.

5) Fixed Deposit charges

Some banks charge a penalty for prematurely withdrawing funds. This amount, and related terms and conditions, are mentioned on the receipt.

6) Nomination details

An account holder can nominate an individual who can manage the deposit in case of his/her premature demise or unavailability. The name and details of the nominee are mentioned on the receipt. The nominee may also be the legal heir of the account.

7) Type of Fixed Deposit

There are two types of Fixed Deposits — cumulative and non-cumulative. The former means that the interest accrued is reinvested into the account. In non-cumulative deposits, the interest is paid out into your Savings Account monthly or quarterly. These details are mentioned on the receipt.

Things to check in your FD Receipt

Double-check these key details to ensure your FD is correct as per the details filled in your Fixed Deposit form:

• Personal information: Ensure that details like your name, address and contact details are correct and match your government-issued ID.
• Account and deposit: Verify your principal amount, date of deposit and tenure to what you had selected. Also, check if the type of account operation (e.g., individual or joint) and nominee details are correct.
• Interest rate: Double-check the interest rate offered (public / senior citizen / NRI / special period offer), interest payment frequency (monthly, quarterly or upon maturity), and compounding or simple interest method.
• FD maturity details: Ensure the maturity date, expected maturity amount and deposit renewal details (if applicable) are correct.
• Tax Deducted at Source (TDS): Verify if applicable TDS is reflected and matches your tax bracket.

Uses of your FD receipt

Your certificate of deposit serves as a proof of investment that can help you manage your diverse investments better. You can monitor your principal amount, the interest you'll get on it, and its maturity value anytime.

It acts as a proof of ownership that helps you claim FD maturity proceeds, renew deposits or transfer accounts smoothly. You can also enjoy tax deductions on your FD interest by presenting the receipt of investment in a tax-saving FD.

In case of any discrepancies, your receipt acts as evidence to resolve issues with the bank regarding your FD.

Benefits of preserving your Fixed Deposit receipt

• Presenting this document makes it easy to process actions such as premature withdrawals, renewals, and loans on your Fixed Deposit.
• At times, an account holder passes away prematurely. When legal heirs do not have access to asset documents, they are unable to access the funds. Since the nominee is mentioned in the Fixed Deposit receipt, having the receipt creates transparency and ease of succession.
• A major benefit is tax filing. If you have invested in Tax-Saving Fixed Deposits, this document can be used as proof of investment to claim deductions.

Also Read: Top 5 reasons to open a Digital Fixed Deposit

The takeaway

It is essential to store your FD receipt securely so that you always have proof of your investment and access to all the details regarding your Fixed Deposit account. Having the receipt also ensures that your nominee can take over the account in the event of the untimely demise of the account holder.

Today, you can open a Fixed Deposit with Axis Bank and avail of benefits such as competitive FD interest rates, flexible tenures and access to a free-to-use FD calculator. The entire process is streamlined digitally, and you can open an account within minutes.

You can also make premature withdrawals if you need funds for emergencies. You will receive a Fixed Deposit receipt after the account opening, which must be preserved with care.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.