Awareness Fridays: Conversion of Term Deposits, Daily Deposits, or Recurring Deposits for Reinvestment in Term Deposits

by Vinaya HS on May 14, 2010

in Finance

Thanks for visiting Capital Advisor. I frequently update this blog to cover various topics on personal finance such as investment strategies, financial products that you should buy and ones that you really should stay away from, financial calculators, emerging themes such as early retirement and financial independence, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

From the Reserve Bank of India’s Annual Policy Statement for the Year 2010-11:

Banks should allow conversion of term deposits, daily deposits, or recurring deposits to enable depositors to immediately reinvest the amount lying in the aforesaid deposits with the same bank in another term deposit. Banks are required to pay interest in respect of such term deposits without reducing the interest by way of penalty, provided that the deposit remains with the bank after reinvestment for a period longer than the remaining period of the original contract.

A precise explanation here.

Awareness Fridays is my initiative to spread awareness on topics relevant to personal finance — every Friday. I urge you to take some time off and absorb this information — it’s pretty useful. And, as always, do spread the word if you find this useful.




Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 1 comment… read it below or add one }

Girish May 17, 2010 at 10:14 PM

Hi Vinaya,
Please check and clarify..
Is it worth keeping an home loan by not doing prepayment
for the benefit of tax. I had 12L HL. Now the principal is around 10L after 5
years of paying EMI. Always not clear if I should have done
prepayments when there was a big amount…
Thanks in Advance,
Girish

Previous post:

Next post: