Highlights of National Savings Time Deposit (TD) Scheme, 2019:
A new Savings Time Deposit Scheme, 2019 has been notified by the Finance Ministry. The key highlights of the scheme are as follows:
Persons eligible to open TD account: A single adult, three adults in joint names, a minor below 10 years of age or a guardian on behalf of a minor or a person on the unsound mind. An individual can also have more than one TD account in his name or jointly with another.
Minimum deposit amount: Rs. 1000, any sum in multiples of Rs 100 can be deposited in the TD account.
Maximum deposit amount: No limit
Type of deposit: The scheme provides for four types of time deposit (or fixed deposit) accounts – One-year account, two-year account, three-year account and five-year account.
Interest rates offered under Term Deposit Scheme:
As per different four types of schemes offered on the four categories of time deposit accounts, the current interest rates and amount (per annum) are as follows:
1 year TD– 6.9% (Interest Rs. 7081)
2 year TD– 6.9% (Interest Rs. 7081)
3 year TD– 6.9% (Interest Rs. 7081)
5 year TD– 7.7% (Interest Rs. 7925)
Conditions for National Savings Time Deposit (TD) Scheme, 2019:
The interest rates are compounded quarterly
The interest shall be paid at the end of the year from the date of opening of the account.
Interest income shall be credited to his/her savings bank account. Moreover, interest on interest shall not be allowed. For example, in case the depositor doesn’t withdraw the annual interest earned on his deposited amount, it won’t earn any additional interest. However, you can withdraw the interest earned every year and reinvest in other schemes.
Earn interest of Rs. 39,625 with a deposit of Rs. 1 lakh in 5 year
As per the current interest rates, as an interpretation, if you make a deposit of Rs 1 lakh in a 5-year account, you will earn a total of around Rs. 7925×5 = 39,625 in five years as interest.
Premature withdrawal: If a 5-year Time Deposit account is closed after four years from the date of deposit, the rate admissible for three-year Time Deposit account will be applicable for calculation of interest.
The TD account can be pledged or transferred as security, on an application made by the depositor in the prescribed form (Form-5) along with an acceptance letter from the pledgee.