Bank Account: Many FD account holders may not be aware of the upgrade in rules

Bank Account: Significant changes to regulations will take effect on January 1, 2025, directly affecting your finances. This series will highlight the modifications in fixed deposit rules starting from that date. Last year, the Reserve Bank of India revised the regulations concerning fixed deposits, including those related to Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs), which will be implemented at the beginning of the new year.

Updated FD rules in 2025

If you are considering making a fixed deposit in 2025, it is essential to familiarize yourself with the updated RBI rules. The new regulatory framework for NBFCs and HFCs will be enforced starting January 1. These updated rules will address various aspects, including the approval and repayment of public deposits, nominations, emergency withdrawals, and the obligation to inform depositors about their deposits. The RBI has released new guidelines regarding fixed deposits that are crucial for current and prospective investors to understand.

Know about RBI guidelines

According to the RBI’s guidelines, depositors can withdraw the full amount of small deposits (up to Rs 10,000) without interest within three months. For larger deposits, a partial withdrawal of up to 50% of the principal amount or a maximum of Rs 5 lakh (whichever is lower) is permitted within three months without interest. In cases of critical illness, depositors may request the withdrawal of the entire principal amount within three months from the deposit date, also without interest. It is important to note that this provision applies to existing deposit agreements that previously did not allow for early withdrawal within the first three months.

Previously, NBFCs were required to inform depositors of the maturity date at least two months in advance; this notification period has now been shortened to 14 days.