Joint Fixed Deposit Rules: How to Withdraw from a Joint FD?

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Joint Fixed Deposit Rules: How to Withdraw from a Joint FD?

Joint Fixed Deposit Rules: An Overview

Every individual dreams of saving their hard-earned money in some way or other, which they either invest or deposit for a set tenure that matures after a while. They require assurance and security that their money, if supported by a financial institution, won't be misused.

Investing in fixed deposits is a well-known way to secure safe returns. Term deposits allow you to earn risk-free interest on the amount invested for the term. When you invest in a fixed deposit, the funds are locked up, and you receive the principal when the FD matures. There are two ways in which earned interest is received :

  • Cumulative Fixed Deposits: where a claim is received once in the whole tenure.
  • Non Cumulative Fixed Deposits: where interest earned can be received periodically throughout the investment.

 Individuals can deposit their money either solely or jointly with some close kin. However, there are some joint fixed deposit rules to consider before investing.

What is a Joint Fixed Deposit?

A joint time deposit allows up to three investors to open an FD account. Account details include all depositors of the data and the first depositor's address. However,  interest income on joint time deposits is paid only to the first depositor. Thus, the first depositor is the most important in a joint-time warranty. Individuals who initiate standard promises with statements such as "either or survivor," "pay together," or "pay each depositor." Before heading to banks or any other financial institutions to deposit your hard-earned money, the investors or individuals must be aware of joint fixed deposit rulesThese rules include Joint fd minimum deposit, withdrawal/premature withdrawal.

Joint Fixed Deposit Rules 

  •  Minimum deposit amount 

To start a fixed deposit plan, you must deposit a standard FD minimum amount. Typical minimum fixed deposit amounts vary by bank and are usually between ₹1,000 and ₹15,000. So remember to check with the relevant bank to understand their policies regarding minimum joint deposits. 

  •  Withdrawal policy in Joint Fixed Deposit 

 Either or survivor:-

  • Who is authorized to receive the FD amount, or in case of withdrawal, who is the rightful receiver? It is a significant joint FD rule. A survivor joint fixed deposit is one of the most common types of joint FD accounts. Between the two. 
  • In the case of joint FD “Survivor” accounts, the account may be held by any account holder. In  the event of the account holder's death, the survivor may continue  the account and receive the final balance with interest by the due date. 
  • If there are nominees on the same account, all terms remain the same and the named nominees will have access to the funds upon the survivor's death. 

Former or Survivor :-

  • In this type of joint account, only the original account holder has access to hold the account until activation. The second depositor can only keep the account if the first depositor dies. 
  • Surviving family members must complete procedures such as submitting a death certificate to  access the account. How does the joint withdrawal of fixed deposits of "former dependents" work?  If the term deposit plan's mandate is 'Alumni or Survivor', the 'Alumni' can manage or withdraw the outstanding amount on their own. This can be done if both depositors are alive. 
  • If the "former" dies before the maturity date of the term deposit, the "survivor" can withdraw the deposit amount when the maturity date arrives.

Joint Fixed Deposit rules for Premature Withdrawal 

 In the case of advance withdrawal, general FD rules are different. Early withdrawal of  FD refers to the amount withdrawn before the deposit period. For joint time deposits, the signatures of both depositors are required if the balance is to be withdrawn before expiry. 

 Early payment requires the consent of both parties involved in a common fixed deposit for life. In the event of the death of one of the depositors, both the surviving depositor and the legal heirs of the deceased member must agree to early withdrawal. Certain changes to these rules can be made at the time of account opening. You should ask about this when determining the details of your joint fixed deposit account. 

 Tax Benefits for Joint Fixed Deposit Withdrawals 

Income tax benefits for joint account fixed deposits apply only to the first depositor. Other account holders are not eligible for joint time deposit income tax benefits. Similarly, only the first account holder's PAN is eligible for TDS.  

Joint Fixed Deposit Rules for Transfering Accounts

Ease of transferring the accounts is one of the most important features of banks that working professionals prefer now-a-days. Due to various circumstances, it may be necessary to change the place of residence or place of residence. In this case,  the transfer of fixed deposits from one branch to another is compulsory. You can transfer your joint time deposit from one bank branch to another bank branch in a few simple steps. Please contact your previous bank branch manager for approval to transfer the joint fixed deposit account. This change must be requested to a new bank account within the same branch. Once the required procedures have been completed, your application for a joint savings account transfer will be approved.

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Ending Note 

Earning best FD interest rates amid the economic regime of low rates and unpredictable market movements is challenging. Applicants should be well aware of FD plans for sole and joint account holders, as with good knowledge, one can get some of the most lucrative interest rates on their investments that turn into better returns. Moreover, there financial institutions that offer one of the most flexible fixed deposit payout structures in India. This article will guide regarding the joint fd rules that will ensure proper knowledge for the applicants so there is no chance of fraudulent activities.

  • What is the joint account fd rule for payment of tax?

  • Can one person withdraw from a joint account?

  • Is money in a joint account taxable?