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.

No. As the money belongs to the minor child and not the bank’s staff, additional interest cannot be paid.

Banks can formulate special fixed deposit schemes specifically for senior citizens offering higher and fixed rates of interest as compared to normal deposits on any size.

Savings bank account cannot be opened in the name of the Government Department/ Government Scheme, except in respect of deposits of Government organizations/ agencies listed below:

1. Primary Co-operative Credit Society which is being financed by the bank.

2. Khadi and Village Industries Boards.

3. Agriculture Produce Market Committees.

4. Societies registered under Societies Registration Act, 1860 or any other corresponding law in force in State or a Union Territory.

5. Companies governed by the Companies Act, 1956 which have been licensed by the Central Government under Section 25 of the said Act, or under the corresponding provision in the Indian Companies Act, 1913 and permitted, not to add to their names the word “Limited” or the words “Private Limited”.

6. Institutions other than those mentioned in clause (i) above and whose entire income is exempt from payment of income tax under Income-Tax Act, 1961.

7. Government departments/ bodies/ agencies in respect of grants/ subsidies released for implementation of various programmes/ Schemes sponsored by Central Government/ State Governments subject to production of an authorisation from the respective Government departments to open savings bank accounts.

8. Development of Women and Children in Rural Areas (DWCRA).

9. Self-help Groups (SHGs), registered or unregistered, which are engaged in promoting savings habits among their members.

10. Farmers’ Clubs – Vikas Volunteer Vahini (VVV).

1. In the case of term deposit standing in the name/s of a deceased individual depositor, or two or more joint depositors, where one of the depositor has died, the criterion for payment of interest on matured deposits in the event of death of the depositor in the above cases has been left to the discretion of individual banks subject to their Board laying down a transparent policy in this regard.

2. In the case of balances lying in current account standing in the name of a deceased individual depositor/ sole proprietorship concern, interest should be paid only from May 1, 1983 or from the date of death of the depositor, whichever is later, till the date of repayment to the claimant/s at the rate of interest applicable to savings deposit as on the date of payment. However, in the case of NRE deposit, if the claimants are residents, the deposit on maturity is treated as domestic rupee and interest is paid for the subsequent period at a rate applicable to the domestic deposit of similar maturity.

All aspects concerning renewal of overdue deposits may be decided by individual banks subject to their Board laying down a transparent policy in this regard and the customers being notified of the terms and conditions of renewal including interest rate, at the time of acceptance of deposit. The policy should be non-discretionary and non-discriminatory.

Banks have freedom to fix the rate of interest chargeable on loans and advances against FCNR(B) deposits to the depositors without reference to their Benchmark Prime Lending Rate (BPLR) irrespective of whether repayment is made in Rupees or Foreign Currency.

No. Banks cannot accept recurring deposits under FCNR(B) Scheme.

Board of Directors of banks have been empowered to authorize the Asset-Liability Management Committee to fix interest rates on deposits within the ceiling prescribed by RBI.

Yes. Banks are permitted to offer differential rates of interest on NRE term deposits as in the case of domestic term deposits of Rs.15 lakhs and above within the ceiling prescribed. Regarding FCNR(B) deposits, banks are now free to decide the currency wise minimum quantum on which differential rate of interest may be offered subject to the overall ceiling prescribed.

Reinvestment deposits are those deposits where interest (as and when due) is reinvested at the same contracted rate till maturity which is withdrawable with the principal amount on maturity date. It is also applicable to domestic deposits.