The Encash 24 (Flexi Deposit) gives you the liquidity of a Savings Account coupled with high earnings of a Fixed Deposit. This is achieved by creating a Fixed Deposit linked to your Savings Account providing you the following unique facilities:
Your money is no longer idle. As soon as the balance in your Savings Account crosses over Rs 25,000, the excess, in multiples of Rs 5,000 will be transferred automatically to a higher interest earning Fixed Deposit Account. The maturity of fixed or term deposits formed as a result of transfer of money from the Savings Bank account will be for a minimum period 6 months upto a maximum of 5 years.
The money parked in Fixed Deposits as a result of the above mentioned sweep out from your Savings account can be easily accessed by issuing a cheque, withdrawing through ATM etc. This amount is automatically reverse swept from the most recently formed Fixed Deposit in units of Rs 5,000 to the Savings account whenever the balance in your Savings account falls below Rs 25,000. The amount broken form your Fixed Deposit will earn interest rates at the applicable rate for the period that the deposit was held with the Bank. The remaining amount of Fixed Deposit will continue to earn the contracted rate of interest.
The tenure for the Encash 24 scheme can be flexible for a minimum period 6 months upto a maximum of 5 years.
*For all new Reinvestment Term Deposits to be opened on and after 1st August, 2013 and all existing Reinvestment Term Deposits that may be renewed on and after 1st August, 2013, interest reinvested would be net of TDS and hence the maturity value would vary to that extent.
Calculation of TDS in respect of interest on Fixed Deposits
TDS in respect of interest earned on fixed deposits, is deducted on the basis of the total interest projected on the aggregate of fixed deposits of the customer, for the financial year.
Thus, if the total projected interest in a financial year crosses the threshold limit which is presently Rs.10,000/-, TDS is deducted proportionately from the existing fixed deposits at the time of interest application.
This is in accordance with Section 194 A 3 (i) (a) of the Income Tax Act.
For any further clarifications, please contact the base Branch.