Fixed deposit accounts can be opened by individuals, Hindu undivided family, sole proprietorship concerns, trusts, associations, clubs as well as partnership firms. Fixed deposit accounts can be opened with any of the private or public sector banks, non banking financial companies and post offices across the country. Accounting opening procedure for fixed deposit accounts has been streamlined by banks and non banking financial companies.
Gone are the days when individuals had to make a number of personal visits to their bank branch to open a fixed deposit account. Existing customers of the bank can now easily open a fixed deposit account online by using their net banking facility on their respective bank website. All banks need to comply with basic KYC guidelines before opening any fixed deposit account. Proof of address, proof of residence and age proof in case of a senior citizen needs to be submitted to the respective bank for opening a fixed deposit account.
Documentation Required for FD Account Opening: All individuals, trusts, associations as well as proprietorship and private limited concerns need to submit their KYC documentation as per the KYC guidelines issues by the Reserve Bank of India. For Indian residents banks accept dedicated proof of identity and proof of address for all fixed deposit account holders. For identity proof one can submit any of the documents including passport, PAN card, Voter ID card, Driving License, Government ID card, Photo ration card and/or any senior citizen ID card.
For address proof any documents including passport, telephone bill, electricity bill, bank statement with cheque and/or any ID issued by post office is acceptable. In case of any other Identity proof or Address proof document can be submitted, subject to the Bank's satisfaction. Individuals will need to show the original documents for verification at the time of account opening while submitting a photocopy each for address proof and identity proof.
Fixed Deposit and Savings Bank Account: A number of banks prefer individuals to open a dedicated savings bank account with the bank in case of opening of a new fixed deposit account. While this is not mandatory as per RBI rules, savings bank account offers the users the convenience to open any fixed despot account online without any physical visit to the bank branch. A savings bank account also helps the bank to transfer the earned interest amount in the bank account of the individuals.
In case of termination of the fixed deposit after the completion of its tenure period, funds are easily transferred to the savings bank account of the individual. The linking of a savings bank account with the same bank branch also helps in availing any loan or overdraft facilities on the fixed deposit. In case such a request is made by the individual, the bank can easily link the deposit to the bank account streamlining the loan facilitation process.
In case the customer does not have a savings bank account with the bank, the bank usually opens a loan account for loan request against the fixed deposit making it a time consuming affair requiring multiple visits to the bank branch. Other advantages of having a savings bank account linked with the fixed deposit account is the availability of sweep-in and sweep-out facilities.