What is The Process and Required Documentation on Fixed Deposit?

You probably already know that FD is quite a safe instrument to park your money for the tenure of your choice. But many people are unaware of the process of investing or the documents required.

How to Go About it?

You have come to the right page. Here you will know about the documents required for fixed deposit and steps to create one.

Choosing the Financial Institution:

Remember, almost all leading financial institutions, banks, NBFCs, housing corporations, and manufacturing companies float their finance firms or chit fund companies to raise cash through FD. As an investor, you can look for the rating against the institution (from CRISIL, etc.) to figure out the right bank/NBFC. This would help you to place your hard-earned money securely.

Arranging the Right Documents

The next step is to arrange the right documents required for a fixed deposit. Different financial organizations may have different requirements. Basically, there are three simple, necessary documents. These are the request form, identity proof, and address proof.

There are online and offline ways of starting an FD. The FD process will be a little different for the two.

Online

Your online FD will need e-KYC. Hence, you should register yourself for online banking. This way, you need not be physically present. Fill the form online, scan ID and address proof, include a copy of PAN card, and fill in the account details from where you intend to pay the money. Submit the form after ensuring all details.

Offline

Offline, you will fill and submit the physical copies of the same documents as above. You need to attach your photograph with your form. Offline, you have the choice of paying in cash.

In the case of joint FD, both holders have to produce their individual proofs and photographs.

Also note that for tax saving, it is advisable to submit form 15G/15H within seven days, in case you do not want the bank/NBFC to debit tax from the interest proceeds.

You must submit the nomination details with ID proof of nominee along with proper address etc. It will be helpful to claim rightful proceeds in case of depositors’ unavailability or demise.

Who is Eligible for a Fixed Deposit?

All resident Indians, including minors and senior citizens, are eligible. Along with that, HUF and firms are also eligible for using the same process.

For NRIs, there is a different deposit. These have different names as NRO, NRE, or FCNR deposits.

Note the following:

If the interest from the deposit is exceeding Rs.10000, updating PAN is mandatory.

If a minor is opening an FD, you must appoint a guardian. Submit all the proofs for both the minor and the guardian, along with the mention of the relationship.

If you are a senior citizen, you must submit age proof to avail of the benefits regarding interest rates applicable to your FD.

Conclusion

Getting a fixed deposit is a safe and straightforward procedure. Broadly, duly filled form with photographs, identity proof, and address proofs are necessary. Both online and offline ways are equally convenient. Senior citizens and minors need to provide additional documents. PAN card updating is mandatory for big deposits. Pick a nominee to ensure the FD reaches the right person if the requirement arises.

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