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Time / Term / Fixed Deposit

The Time Deposit Accounts in banks, also called Fixed Deposit or Term Deposit accounts. These accounts offer the facility of investing surplus funds and savings to mature on a predetermined date with relatively higher rates of interest without loosing liquidity and safety of funds. The interest rates under the scheme depend upon the period of investment and also vary from Bank to Bank. The accounts offer facility of interest withdrawal at periodical intervals or to get it on maturity along with the principal.

The deposits in these accounts are considered risk free investments. These accounts offer the facility of loan against the deposits and can also be closed prematurely (with some interest penalty).

Salient features of Bank Time Deposit Accounts

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Individuals, partnership firms, private and public limited companies, HUFs/ specified associations, societies, trusts etc.


The requirements for opening of accounts by individuals are the same as mentioned under Savings Bank Accounts.

The requirements for opening of accounts by trusts, societies, partnership firms and companies are the same as mentioned under Current Accounts.

Usually Term Deposit / Fixed Deposit Accounts are maintained by banks for Saving Bank / Current Account holders only.

Minimum amount

₹ 1,000/-. (may vary from bank to bank)

Maximum amount

No maximum limit

Maturity period

15 days to 10 years.


The Interest Rate is related to the Maturity period of the deposit.

Usually deposits for longer periods attract higher interest rates.

The Interest Rate varies from bank to bank.

Interest can be received at monthly (discounted rate) or quarterly rests or the interest can be reinvested to be received with the principal on maturity.

In case of reinvestment of interest, it is compounded at quarterly rests.

Nomination facility



Transferable from one branch of the bank to another.

Tax benefits

Not Available

Interest Taxability

With effect from 1st April 2018 (AY 2019-20) Senior Citizens (i.e. Residents aged 60 years or above) are eligible for exemption of interest income from Bank / Post Office deposits (Saving accounts / Time deposits / RD accounts) upto ₹ 50,000/- under Section 80TTB. (They are, however, not eligible for rebate under section 80TTA.)

Account holder other than Senior Citizens are not eligible for any exemption.

Overdraft / Loan facility

Overdraft/loan facility is available against security of the term / fixed deposit.

Premature payment

Premature payment is allowed subject to penalty of lower interest.

Other features

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Updated : Feb 05, 2019