Revised Fixed Deposit rules from Jan 1: Check RBI's new regulations for FD schemes

Fixed Deposit Rules 2025: Starting from January 1, 2025, The updated regulatory framework for housing finance companies (HFCs) and non-banking finance companies (NBFCs) by the Reserve Bank of India will be implemented. These revised guidelines, which were unveiled in August, cover various aspects including the acceptance and repayment of public deposits, such as nominations, emergency expenses, notifying depositors about deposit maturity, and more.

As per the guidelines set by the Reserve Bank of India (RBI), depositors may withdraw the full amount of small deposits (up to Rs 10,000) within three months of depositing without accruing any interest. 

For larger deposits, partial withdrawals of up to 50% of the principal amount or Rs 5 lakh (whichever is lower) are permitted within three months without interest. 

In cases of critical illness, depositors are allowed to withdraw the entire principal amount prematurely without interest, irrespective of the deposit term. 

Furthermore, non-bank financial companies (NBFCs) are now required to inform depositors of maturity details at least two weeks prior to the maturity date for more timely updates.

Other updates

Nomination Updates: NBFCs have been advised to establish a proper system for acknowledging the receipt of a duly filled nomination form, cancellation, or alteration of the nomination. It is important to provide this acknowledgment to all customers, whether requested or not.

Nominee's mention in passbook: NBFCs should consider recording details of the nomination on passbooks or receipts. This should include labeling the entry with "Nomination Registered" and the nominee's name, with the customer's consent.

Withdrawal clauses: As per the RBI circular, individual depositors who hold public deposits are allowed to request premature withdrawal within three months from the date of deposit. In such instances, a maximum of 50% of the principal amount or Rs. 5 lakh (whichever is lower) can be withdrawn without accruing any interest. The remaining amount will continue to earn interest at the agreed upon rate and will adhere to the standard regulations for public deposits.

Critical illness provision: In cases of critical illness, depositors have the option to request a full withdrawal of their principal deposit amount before the three-month period from the date of deposit. This withdrawal will be processed without accruing any interest. It is important to note that this provision also extends to existing deposit contracts that previously did not allow premature withdrawal rights within the initial three months.

Notification of deposit maturity: Previously, NBFCs were required to inform depositors about the maturity date of their deposits at least two months in advance. However, this notification period has now been revised to 14 days. NBFCs are now mandated to notify depositors about the maturity date at least 14 days prior to the deposit maturing.