Fixed Deposits Buying Guide

I. How to Buy in 4 Easy Steps

• You need to determine the amount that you can set aside to invest in a Fixed Deposit. This is to ensure that the investment is tax efficient as well as does not attract any undue penalties.
• Shop around for the best rate, refer to online sites, magazines etc.
  
• Visit the branch and read the fine print of the terms
• Provide the required papers and the cheque/draft for the deposit.

II. Buyer’s Checklist

For opening a fixed deposit where you do not have an existing banking relationship you would need to provide all the documents as needed for opening a new account. These documents for a resident individual include:

Identity Proof (You can provide anyone of the following)

• Original letter of introduction from existing bank along with KYC cheque of the same Bank
• Driving License
• Voter Identity Card with KYC cheque for operating accounts.
• Employee Identity Card
• PAN Card
• Defence Dependent's card
• Ex-Service Man Card
• Bar Council/Indian Medical Association Card/Senior Citizen Card

Proof of Address quoted for communication (You can provide anyone of the following)

• Introduction by an existing and satisfactory customer of the bank
• Latest Electricity Bill
• Certificate from the postal office confirming address of applicant
• Original Letter from Employer certifying the residential address of applicant. Signature of the employee has to be attested on the letter.
• Telephone bills from any telephone service providers
• Consumer gas connection card/book/Pipe Gas bill (same as electricity bill)
• Certificate from the ward/equivalent rank officer, maintaining election roll, certifying address of the applicant

The following documents are usually accepted as proof of both identity and address:

• Passport
• Freedom fighter's pass issued by Ministry of Home affairs, Government of India with photograph of applicant
• Pension payment order/book/Card issued by State/Central Government of India.
• Printed Ration Card with Photograph of applicant.
• Bank Pass Book with photograph issued by SBI and its subsidiaries or Nationalised Banks
• Arms License issued by State/Central Government of India authorities

Age Proof (if a senior citizen)

• Secondary School Leaving Certificate (Class 10)
• LIC Policy
• Voters Identity Card
• Pension Payment Order
• Birth Certificate issued by the competent authority
• Passport / Defence ID Card / Govt ID Card (Provided they have the cardholder's photo,signature and date of birth)
• PSU issued ID Cards
• Senior Citizen Cards
• Passport Size photographs

Documents needed for a Non Resident Indian(NRI) or Person of Indian Origin (PIO)are :

• Copy of passport and valid visa or work permit
• Identity Proof (Same proofs as Resident Individual)
• Address Proof of Indian Address (Same proofs as Resident Individual)
• Address Proof of Foreign Address

Utility Bill, i.e, Electricity Bill, Landline Telephone Bill, Gas connection Bill, Water connection Bill

1. Overseas/Indian Bank statement (Bank Passbook will not be considered as valid address proof)
2. Rent Receipt issued in last 6 months along with duly stamped/registered lease deed. Lease deed should be valid as on date of account opening.
3. Address on Passport
4. Letter from existing banker, this letter should clearly specify that the mentioned address is the customers communication address and period of relationship with the bank which should be more than 3 months.
5. Residence Permit (Government issued Identity Card)
6. Letter from Government postal authorities issued in last 6 months
7. Driving License (Only if issued by US & UK authorities)
8. Letter from the employer duly notarized issued in last 6 months mentioning your name and address.

• Passport Size photographs
• Attestation might be required for all these documents
• Sometimes, a cheque drawn on an existing banker in India or on your bank account abroad or an original cheque issued by you and paid by your banker outside India might be required to confirm banking relationship.

III Questions You Must Ask – What You Need to Consider Before Buying

Before opening a fixed deposit account, choose the tenure and amount that you are comfortable with and would not need to make a premature withdrawal from the same.

And ask the bank representative to explain the rate and the interest income that you will be earning both pre and post income tax.
Get to know the charges for premature withdrawal or any other charges that might be levied on the deposit.
Choose the interest income payout frequency that suits your needs.

IV. How to Compare Products – How to Select the Best Product for Yourself

If you are not looking for any additional benefits like ATM card against a deposit or no penalties for premature withdrawals, the rate or the net yield that you will be earning on the deposit is the primary comparison parameter. You can use iTrust to get the best rates from the leading banks in India across product categories like NRI Deposits, Senior Citizen deposits and Tax Saving Deposits.

V. Now That You Own the Product

A Fixed deposit is a reasonably low maintenance product, you just need to take care that the fixed deposit needs to be either renewed or withdrawn on maturity to avoid loss of interest in the interim period.
For a recurring deposit, regular payments need to be made as per the frequency chosen by you to ensure no loss in interest income.

VI. Understand the Fine Print and Know Your Rights as a Consumer

In case, you feel that the bank has been delaying the repayment post maturity or levying charges without telling you. You can report this to the Banking Ombudsman of your state as appointed by the Reserve Bank of India.
The following link gives you the names and addresses of the Banking Ombudsman across India:

http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=164