Banks cannot accept interest free deposits other than in current account.

Banks can pay interest on savings bank accounts at quarterly or longer rests.

Interest on term deposits is payable at quarterly or longer rests. Banks can pay interest monthly by discounting the quarterly interest accrued.

Differential rates of interest can be paid on single term deposit of Rs.15 lakhs and above and not on the aggregate of individual deposits where the total exceeds Rs.15 lakhs.

Banks are prohibited from employing/ engaging any individual, firm, company, association, institution for collection of deposits or selling of deposit linked products on payment of remuneration or fees or commission in any form or manner except commission paid to agents employed to collect door-to-door deposits under a special scheme.

The term deposit is a contract between the bank and the customer for a definite term and it cannot be paid prematurely at bank’s option-. Term deposit can be paid prematurely at the request of the customer.

Banks may not normally refuse premature withdrawal of term deposits of individuals and Hindu Undivided Families (HUF), irrespective of the size of the deposit. However, the bank at its discretion, may disallow premature withdrawal of large deposits held by entities other than individuals and Hindu Undivided Families. Banks should notify such depositors of its policy of disallowing premature withdrawals in advance i.e. at the time of acceptance of deposits.

Banks have freedom to determine their own penal rates of interest for premature withdrawal of term deposits.

Banks should pay interest at the originally contracted rate on the deposit amount for the holiday/ Sunday/ non-business working day intervening between the date of expiry of the specified term of the deposit and the date of payment of the proceeds of the deposits on the succeeding working day.

No. Children (including minor) are not eligible for additional interest admissible to bank’s staff member/ retired staff member.