What is TDR in banking?
What is TDR in Banking – The long-form of TDR is Term Deposit Receipt. Before understanding what is TDR in banking, you need to know what is a term deposit. The account holder opens his term deposit account with the bank. Depositor deposit his money in the bank for a specific period with a certain interest rate. The bank pays higher interest rates on such deposits than other deposits. There are two types of term deposits:
TDR full form
• TDR (Term Deposit Receipt)
• STDR (Special Term Deposit Receipt)
1. TDR (Term Deposit Receipt) –
What is TDR in banking – The account holder sometimes demands weekly, monthly, half-yearly, yearly interest on this term deposit account. If interest on a term deposit account is demanded from the account holder before maturity, it is called TDR.
2. STDR (Special Term Deposit Receipt) –
What is STDR in banking – Account holders sometimes do not want interest on this term deposit account before the maturity of the term deposit. When the account holder demands the amount of interest at the end of the term deposit this is called STDR.
Differences between TDR and STDR-
We can learn What is TDR in banking and What is STDR in banking through the following points-
|1. Definition- The amount of interest charged by the account holder on term deposit before maturity is called TDR.||The account holder agrees to receive the interest on the term deposit at the end of the term, it is called STDR.|
|2. Duration – The duration of TDR ranges from a minimum of 7 days to a maximum of 3650 days.||The duration of STDR ranges from a minimum of 180 days to a maximum of 3650 days.|
|3. Calculation of interest – In TDR, the calculation of interest is done as simple interest.||The calculation of interest in STDR is done as compound interest.|
|4.When to get interest- In TDR interest is available on a weekly, monthly, half-yearly, yearly basis.||Interest in STDR is earned on the maturity of term deposit.|
|5. Amount of maturity – principle amount is obtained at the end of the term in TDR.||In STDR, after the expiry of the term, the principle amount with interest is obtained.|
Features of TDR – (What is TDR in banking)
1. Secured Investment- It is safe to invest in term deposits. There is no risk involved.
2. Regular Income – In TDR, weekly, monthly, half-yearly, annual income is maintained as per the demand of the account holder.
3. Fixed Income – In TDR the calculation of interest is done in the same way as simple interest so fixed income is obtained.
4. Regarding Senior Citizens – Fixed Deposits get a half percent higher interest rate for senior citizens so it is beneficial for senior citizens to make a term deposit.
5. Income tax benefits are available in TDR.
6. You get interest according to the interest frequency you choose.
7. The principal amount is returned to the account holder after the expiry of the term deposit.
8. The minimum amount in TDR is Rs.1000.
How to open a term deposit account?
1. According to some bank rules, if you want to open a term deposit account, you need to have a savings account with that bank.
2. But not all banks have this kind of compulsion.
3. The account holder should first deposit the check or cash in his savings account.
4. Fill in the term deposit form. In this form, you have to fill in information about your name, customer ID, fixed deposit amount, interest rate, nomination, tdr / stdr.
5. Savings account withdrawal slip or check has to be filled along with the form.
6. After providing such information, your term deposit account is opened by the bank and you are given a receipt for the term deposit.
This facility is available in some banks. There is an option of auto-renewal in the term deposit form. By ticking this option you can use the facility of auto-renewal.
Auto-renewal means that after the expiry of your term deposit receipt, the term deposit receipt is automatically renewed but the interest rates are different.
What to do if you want to break the term deposit receipt in the middle?
What is TDR in banking- Term deposit receipt is made for a specific period. But sometimes due to some reason, the term deposit receipt has to be broken. In this form when a fixed deposit is made, how many days from that day till today, what is the interest rate for the period done, 1% is deducted from the interest rate as a penalty and the fixed deposit is paid to the account holder.
What to do if you want to take a loan on a term deposit receipt?
What is TDR in banking- The facility of taking a loan on term deposit receipt is also provided by the bank. The loan is given up to 90% of the receipt amount, and the interest rate for that receipt is 2% higher than the interest rate. The loan amount has to be repaid to the account holder till the expiry of the term deposit receipt. If this amount cannot be repaid to the account holder, the loan is recovered by breaking the receipt by the bank.
As per RBI rules, each account is required to have a Nomination. The amount on the account is paid to the nominee after the account holder.
What is TDR in banking?
What is the full form of TDR?
The full form of TDR is Term Deposit Receipt.
What is TDR in banking?
If interest on a term deposit account is demanded from the account holder before maturity, it is called TDR.
What are the features of tdr?
1. safe investment. 2. Regularly interest to account holder. 3. Additional interest rate for senior citizens. 4. You can set the frequency of interest. etc. monthly, quarterly, half-yearly etc.