RBI’s new norms for Interest on Unclaimed Matured Deposit

Reserve Bank of India (RBI) has notified new norms for interest on the amount left unclaimed with bank after a term deposit matures.


  • Presently, if a term deposit matures and proceeds are unpaid, amount left unclaimed with bank attracts rate of interest as it is applicable to savings deposits.
  • New norms are applicable on deposits across all commercial banks, small finance banks, local area banks, and cooperative banks.

Types of Deposits in India

Banks works as the custodians of public money. It mobilizes the deposits of public. There are two types of deposits namely, Time Deposits and Demand Deposits.

What are Time Deposits?

When money is deposited for a fixed tenure is called as time deposit. Such money cannot be withdrawn before its maturity which is fixed at a particular time. It is also called as “Term deposits”. ‘Fixed Deposit’ is the most common example of time deposit. Time deposits are also eligible for interest payments. Interest rate of the time deposit depends on the tenure and amount of deposit. Interest rate varies from bank to bank. Interest rate is usually higher for time deposits with long maturity time.

Types of time deposit

Time deposits is of three types:

  1. Fixed deposits, where fixed rate of interest is paid at a fixed & regular intervals
  2. Re-investment deposits, where Interest is compounded quarterly and paid on maturity.
  3. Recurring deposits, where fixed amount is deposited at regular intervals for fixed term. Repayment of principal & accumulated interest is done at the end of term. These deposits usually target the persons who are salaried or receive regular income. Such deposits are opened for 6 months to 120 months.

What are Demand deposits?

When funds deposited is withdrawn by customer at any time without any advanced notice to banks, are called as demand deposit.




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