- What is Auto Fixed Deposit in Axis Bank?
- Features of the Axis Bank Auto Fixed Deposit
- Liquidity of Axis Bank Auto Fixed Deposit
- Maturity of Axis Bank Auto Fixed Deposit
- Premature Closure
- Death of One of the Depositors
- Premature Withdrawal of Axis Bank Auto Fixed Deposit
- Tax on Axis Bank Auto Fixed Deposit
- Frequently Asked Questions
What is Auto Fixed Deposit in Axis Bank?
The Axis Bank Auto Fixed Deposit from Axis Bank connects an existing Savings Account to a Fixed Deposit. When the balance in the Savings Account reaches Rs. 25,000, money in multiples of Rs. 5,000 is automatically transferred to a Fixed Deposit. With Auto Fixed Deposit, you can start a Fixed Deposit for up to 5 years or take advantage of a short-term benefit for as little as 6 months.
Explore: Axis Bank FD Interest Rates
Features of the Axis Bank Auto Fixed Deposit
- The auto fixed deposit is linked to an existing savings bank account.
- When the savings account balance crosses Rs 25,000 a fixed deposit is automatically created in multiples of Rs 5,000.
- The tenure of Axis Bank Auto Fixed Deposit is 6 months
- An existing savings account holder is eligible for an Axis Bank Auto Fixed Deposit.
- The customer’s chosen frequency will be used to build the term deposit accounts.
- Wherever appropriate, these deposits will earn interest at the rates set by the Reserve Bank of India as per their directives from time to time, or at the rates set by the Bank from time to time.
- Withdrawals of units will be automatic in multiples of Rs. 5,000/- on a LIFO (Last in First Out) basis. This is to meet withdrawals/ overdrafts/ minimum balance requirements in Savings Account on account of payment through ATM, cheque received in clearing/collection, or any other means across the counter, or a request for transfer of funds from Savings Account. The units so withdrawn will cease to earn interest as of the date of withdrawal, and any interest due up to that date will be paid in accordance with current RBI directives/bank policy.
- The fixed deposit can be booked for a period of maximum 5 years for a minimum FD tenure of 6 months.
Liquidity of Axis Bank Auto Fixed Deposit
You can easily access your funds in the fixed deposit through a cheque or ATM withdrawal.
The amount withdrawn is automatically reverse swept from the most recently created fixed deposit. The reverse swept will be in units of Rs 5000 to the linked savings account whenever the account balance is less than Rs 25,000. The amount withdrawn will earn interest income at the applicable rates for the period for which the deposit was with the bank
The remaining fixed deposit will earn interest income at the contracted rate of interest.
Maturity of Axis Bank Auto Fixed Deposit
An overdue term deposit or a portion may be renewed from the date of maturity to the date of renewal. This is possible only if the overdue time from the date of maturity to the date of renewal is less than 14 days. The applicable rate of interest for the period of renewal, as prevailing on the day of maturity, shall be paid on the amount of the deposit so renewed. When a deposit is overdue for more than 14 days, the depositor may place the entire amount of the overdue deposit, or at least the principal amount of the deposit, as a new term deposit. Here the interest will be paid for the overdue period on the amount so placed which is currently simple interest at Savings Bank interest rates.
Premature Encashment: For Rupee Term Deposits of a contracted amount less than Rs. 5 crores opened/renewed on or after December 15, 2017 (including Flexi Deposits),
- For the first partial withdrawal with value <= 25% of the Term Deposit’s original principal value, Premature Closure Penalty Rate will not be applicable.
- For subsequent partial withdrawals, Premature Closure Penalty Rate will be applicable on the entire withdrawal amount.
- For the partial withdrawal with value > 25% of Term Deposit original principal value, Premature Closure Penalty Rate will be applicable for the entire withdrawal amount. However, for Rupee Term Deposits closing within 14 days from the date of booking of the deposit, the interest rate shall be the rate applicable for the period the deposit has remained with the bank or the contracted rate, whichever is lower.
Death of One of the Depositors
Premature termination and payment of Term Deposits held on an ‘Either or Survivor’, ‘Former or Survivor’, or ‘any one’ basis shall be given to survivor /s in the case of the death of one of the depositors. The bank will receive a legitimate discharge from the survivors on successful payment. There will be no penalty for such an early withdrawal. The interest rate, on the other hand, shall be the rate in effect at the time the deposit was made or the agreed rate, whichever is lower.
Payment of the proceeds of such deposits to the survivor is a legal discharge of the bank’s liability under the terms of the agreement.
- There is no court order prohibiting the bank from making the payment from the specified account.
- The survivor would receive the payment from the bank as a trustee of the deceased depositor’s legal heirs.
- The payment to him or her would not impact any right or claim that any person/s could have against the survivor to whom the payment is given.
Premature Withdrawal of Axis Bank Auto Fixed Deposit
Joint Fixed Deposit Accounts
- If a premature withdrawal is required by either of the joint holders then they must submit a mandate at the time of opening the FD account.
- The payment of proceeds of such deposits will be to either one of the joint account holders who represent a valid discharge of the bank’s liability.
- There must not exist an order from a competent court restraining the bank from making the payment to either of the holders.
Single Fixed Deposits
- If the deposit is held individually and the nominee requests a premature withdrawal in the event of the deposit holder’s death.
- In the event of a decedent’s death, the deposit’s nominee has the right to withdraw the funds before its maturity. He or she must, however, make a request to the bank.
- Payment of the deposit proceeds to the nominee is a proper discharge of the bank’s liability.
- The nominee would be receiving the payment from the bank as a trustee of the deceased depositor’s legal heirs.
- The payment to him/her has no bearing on the legal heirs’ right or claim against the nominee to whom the payment is made.
Tax on Axis Bank Auto Fixed Deposit
- The interest income is chargeable to tax under the head of income from other sources.
- The interest income will be added to the gross total income. It is taxable at the applicable slab rate for the relevant financial year.
- Moreover, tax deducted at source is applicable on interest income.
- TDS is deducted when the total amount of interest due or reinvested on FDs across all branches exceeds Rs 40,000. For senior citizens, this limit is Rs 50,000 in a financial year.
- TDS Certificates will be mailed at the end of each quarter during the financial year. The TDS certificate contains the details of the amount of TDS deducted.
- According to section 206AA, every person who gets income on which TDS is deductible must provide his or her PAN. If the depositor fails to furnish the PAN then TDS will be taken at a rate of 20% instead of the current rate. If your PAN is not updated with the Bank or is incorrect then as well bank will deduct TDS at 20%
Frequently Asked Questions
Axis Bank Auto Fixed Deposit can be opened by a savings account holder. Moreover, the account can be opened jointly by account holders or a minor under the guidance of an adult.
Yes, the interest rate on Axis Bank Auto Fixed Deposit is higher than the rate for other individuals.
To avail of the Auto Fixed Deposit feature, you must submit a completed application form together with all required documents to your nearest Axis Bank branch office. Such documents are PAN and proof of address such as Aadhaar, VoterID, driving licence, etc.
No, you cannot open the Axis Bank Auto Fixed Deposit for 7 years. The maximum tenure for the FD is 5 years.
No. The primary requirement for Axis Bank Auto Fixed Deposit is that you must hold a savings account with the bank.