Hello Friends, Welcome to my Blog Investinfy.com the best financial blogs where you will be able to read about the end to end information on many investment schemes and financial topics. In this Blog post we will be focusing on TDR.
Generally when we want to invest money on any investment scheme , we always asks our friends and relatives that where we can invest ? and they suggests the investment schemes which they like most. Then we invest as per their suggestions, that is good as we consider them as our well wisher , But here I want to mention one thing, if we know end to end information of each investment schemes at least it will help us to understand if that investment scheme is good for us or not.
Hence it is better to have a complete idea about each investment scheme where we invest. Therefor this blog will help you to know end to end information of many Indian investment schemes available right Infront of you.
In this blog post I will be explaining my analysis on TDR Investment scheme. This will be a complete guide on TDR investment scheme. Please read till end of the blog post to know the complete information about this TDR investment scheme. Lets get started.
Table of Contents
- What is TDR?
- How Does TDR work?
- Features of TDR
- Who can open the TDR Account?
- How Do you Open the TDR Account ?
- TDR Deposit Limits
- TDR Terms
- TDR Interest Rate
- TDR Compounding Frequency
- TDR Interest Credit Method
- TDR Auto-Renewal Facility
- Income Tax Benefits
- Pre-Mature Closure of TDR
- Loan Facility from TDR account
- Account Conversions
- Nomination Facility
- TDR Earning Projection Table
- FAQ about TDR Investment Scheme
What is TDR?
TDR stands for Term Deposit Receipt. TDR is a type of fixed deposit where we can opt to receive monthly or quarterly interest.
This scheme is also known as Interest Pay-out Scheme and this scheme is best suitable for the people who wants to receive a regular income.
How Does TDR work?
Let us understand how does this TDR (Term deposit receipt) work easy step by step.
- Step1 : You Need to deposit a lump sum amount for specific period.
- Step2 : You need to specify whether you want to receive the interest Monthly or Quarterly .
- Step3 : You will receive interest as per your chosen interest frequency till the end of your tenure.
- Step4 : At the end of your tenure you will get your deposit amount back.
Features of TDR
- Safe Investment Option
- Guaranteed returns
- Regular monthly or quarterly income
- Senior citizens get extra interest rate compared to other customers.
Who can open the TDR Account?
- Any resident individuals can open the individual account.
- Joint account can be created by 2 or more individuals.
How Do you Open the TDR Account ?
- First you need to go your preferable bank and fill the required form requesting to open your TDR account.
- Account can be opened by cash or cheque.
- Date of realisation of cheque will be the date of account opening. That means if you are submitting the cheque to open the TDR account, once the cheque is cleared and money is deposited to your bank account from that day the account opening date is counted and you will start earning the interest from the day.
- If you have your saving accounts then you can create TDR from the saving account funds.
TDR Deposit Limits
- Minimum Deposit amount is Rs. 1000.
- No Maximum limit of deposit amount that means there is no maximum limit defined hence you can deposit any amount above 1000 rupees and earn your monthly or quarterly income best on that.
- Minimum Term – 7 days
- Maximum Term – 10 Years
- few banks offers more than 10 years terms .
TDR Interest Rate
Interest rate on the day of your Term deposit receipt account opening will remain same throughout the tenure of TDR. It will not change even if there are changes to the interest rate thereafter.
The interest rate % varies from one bank to another bank. Please find the below current interest rates of few bank’s Term deposit receipt FD .
|Bank Name||Interest Rate for general citizen per year||Interest rate for Senior Citizen per year|
|State Bank Of India||2.90% to 5.50%||3.40% to 6.20%|
|HDFC Bank||2.50% to 5.60%||3.00% to 6.35%|
|Axis Bank||2.50% to 5.75%||2.50% to 6.50%|
|Canara Bank||2.90% to 5.50%||2.90% to 6.00%|
|Punjab National Bank||2.90% to 5.25%||3.50% to 5.75%|
The interest % varies depending upon the period of deposit. Please find the below table of SBI Term deposit receipt FD interest rate as per the period of deposit. Longer the period higher the interest rate. For more information about the FD interest rate read here
|Period||Interest rate for general public||Interest rate for Senior citizen|
|7 days to 45 days||2.90%||3.40%|
|46 days to 179 days||3.90%||4.40%|
|180 days to 210 days||4.40%||4.90%|
|211 days to less than 1 year||4.40%||4.90%|
|1 year to less than 2 years||5.00%||5.50%|
|2 years to less than 3 years||5.10%||5.60%|
|3 years to less than 5 years||5.30%||5.80%|
|5 years and up to 10 years||5.40%||6.20%|
TDR Compounding Frequency
Compound interest is not applicable for this scheme. Simple interest calculation is followed in this scheme.
TDR Interest Credit Method
- You can receive interest either Monthly or Quarterly as per your requirement .
TDR Auto-Renewal Facility
- If you do not provide any specific instructions to your bank while opening the Term deposit receipt account or before maturity. The Term deposit receipt account is automatically renewed upon maturity.
- It will be renewed for the same period for which it was opened initially.
- The interest rate for the renewed period will be the interest rate on the day of maturity.
Income Tax Benefits
Effective 01-April-2020, the income tax benefits will depend upon whether you choose old tax system or new tax system.
Old Tax System
- Deposit amount (upto Rs. 1.5 lakhs) under 5 years tax saving FD will qualify for tax deduction under section 80C of income tax Act.
- No Tax Deduction benefits for deposit other than 5 years tax saving FD.
- There is a TDS (Tax deducted at source) from bank if the interest received more than Rs. 40000 in a financial year. This is for ordinary citizens. The new TDS limit of Rs. 40000 id from 01-April-2019 onwards. Earlier the limit was Rs. 10000 .
- Bank will provide TDS certificate for the tax deducted.
- Interest received is taxable. you need to declare the interest income under ” income from other sources” during your tax returns filing and pay the income tax as per your income tax slab.
New Tax System
- No income tax benefits. The deposit amount won’t get any deduction benefits under section 80C of any income tax Act.
- There is a TDS (Tax deducted at source) from bank if the interest received more than Rs. 40000 in a financial year. This is for ordinary citizens. The new TDS limit of Rs. 40000 id from 01-April-2019 onwards. Earlier the limit was Rs. 10000.
- For Senior Citizens, TDS limit is Rs. 50000 from 1st-April-2018 onwords. Earlier the limit was Rs.10000.
- Bank will provide TDS certificate for the tax deducted.
- Interest received is taxable. you need to declare the interest income under “ income from other sources” during your tax returns filing and pay the income tax as per your income tax slab.
Pre-Mature Closure of TDR
- Premature Closure of term deposit receipt is possible . But there will be a penalty for the pre-mature closure.
- The penalty amount is generally 1% of the interest earned.
- Interest will be payable for the duration for which the TDR was kept minus the penalty amount.
- The penalty amount may change from time to time.
Loan Facility from TDR account
Loan facility is available upto 90% of the deposit amount.
Yes account conversions is possible from TDR (regular interest pay-out) account STDR (cumulative interest pay-out) and vice versa.
Nomination facility is available for TDR Investment scheme. You can either nominate at the time of account opening or after opening the account (but before maturity).
TDR Earning Projection Table
let us take an example and see how much we can earn monthly interest by investing 10 lakhs rupees with TDR investment scheme with current interest of above SBI interest rate table.
|Period in years||Deposited Amount in INR||General public Monthly interest Amount in INR||Senior citizen Monthly interest Amount in INR|
|Period in years||Deposited Amount in INR||General public Quarterly interest Amount in INR||Senior citizen Quarterly interest Amount in INR|
Once the period is over you will get back your deposited amount. Now you can plan as per your needs.
FAQ about TDR Investment Scheme
Is it possible to transfer my TDR account from one branch to another branch?
Yes TDR accounts can be transferred from one branch to another branch without any extra cost.
I am a NRI can I open TDR account ?
NRI (Non resident Indians ) can not open residential fixed deposits. But they can open NRI fixed deposits accounts and it is a different scheme completely.
What will be the penalty if I close the TDR account before maturity period?
The penalty amount is generally 1% of the interest earned.
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