A fixed deposit is a low-risk investment option that can help your wealth grow and finance your life after retirement. Putting money into an FD account offers a low level of risk and ensures a guaranteed return. Some banks offer higher interest rates on their FDs compared to standard savings accounts. These accounts can be opened either jointly or individually.
In certain situations, the primary account holder may pass away before the FD reaches its maturity date. In such instances, it is crucial for family members to be aware of the procedure for claiming both the initial deposit and the accrued interest. The process for claiming the funds will differ depending on the specific type of FD account. Here’s what you need to know about claiming the investment. The process is different for different types of FD.
Holding Patterns and Nominees in an FD
When you open a Fixed Deposit account, you can do it alone or with others. If you choose to open a joint account, you have different ways to manage it. Here are the common options:
- Either or survivor: Only two people can open this account. The bank or financial institution will follow instructions even if only one of the joint account holders requests it.
- Anyone or survivor: More than two individuals can open this account. The bank or financial institution will act on instructions from any one of the joint account holders.
- Former or survivor: Only the main account holder can use the account. The secondary account holder can only use it after the main account holder passes away.
- Latter or survivor: Only the secondary account holder can use the account. The main account holder can only use it after the secondary account holder passes away.
- Joint: All account holders must sign any request to operate the account.
- Jointly or survivor: Like "Joint," but if one account holder dies, the survivor can still use the account.
- Nominee: The nominee is like the guardian of the fixed deposit. They have control over the FD if something happens to the account holder.
FD Maturity Claims After the Death of the Account Holder
Here are the common types of FD accounts and the processes that you will need to follow.
- Either or survivor option
In the event of the death of the first account holder, the second holder gets the FD amount. However, in the event of the death of the second holder, you can delete their name from the FD and add another nominee. Preserve and grow your wealth comfortably by investing in Bajaj Finance Fixed Deposit.
- Anyone or survivor account
As a government can never run out of funds, treasury bills are considered risk-free investments. A fixed deposit scheme is independent of market volatility and is usually the safest option. A Bajaj Finance Fixed Deposit has high stability ratings such as CRISIL AAA/STABLE and [ICRA]AAA(Stable), making it more reliable.
- Joint holding account
This account type provides the returns from FD only when you and the co-holder sign the relevant documents for discharge. In case of any unfortunate event, either of the co-holder can withdraw the funds.
- Single holding with nomination
A single holding account means only the holder can perform all the actions related to the FD. The nominee’s authority is limited to receiving the funds in event of the holder’s death.
- Single holding without nomination
This is a pure single-holder account, which means that only the holder has access. In event of the death of the holder, the family members will have to go through a few formalities such as providing certain documents including a will or succession certificate to receive the funds.
You can easily calculate your returns by using the fixed deposit calculator.
Process to Claim the Fixed Deposit Amount
1. Contact the FD provider to get information about the account type
2. Submit the following documents:
- Claim form
- Death certificate
- Succession certificate
- Indemnity bond
3. Choose to continue with the FD or liquidate it
Bear in mind that while you may want to liquidate the FD before the lapse of the tenor, the final decision rests with the FD provider.
To make this process easier, it is important to be aware of the type of FD account to choose. Select a trusted family member as the nominee and inform them about the terms governing your FD. It is also advisable to keep a record of all investments and bank details in one place so that your family can easily access all the information.