Monday, August 14, 2006


The Central Government has come out with the BANK TERM DEPOSIT SCHEME, 2006 under section 80 C. The salient features of the same are as under :

  • Investment in Term Deposit has to be with a Schedule Bank
  • The investment shall not exceed Rs. 1 Lac.
  • Term Deposit can be in joint names, however in case of joint holder, first holder would be entitled to deduction benefit u/s 80C.
  • No term deposit shall be encashed before the expiry of five years from the date of its receipt.
  • However, in the event of the death of the holder of a term deposit in respect of which a nomination is in force, the nominee or nominees shall be entitled at any time before or after the maturity of the term deposit to encash the term deposit.
  • Term Deposit can be transferred from one branch to another branch.
  • Term deposit shall not be pledged to secure loan or as security to any other asset.
  • Only an individual or a HUF can invest.
  • The rate of interest on the term deposit shall be in accordance with the rate fixed by the scheduled bank from time to time.
  • Interest on these term deposits shall be liable to tax under the IT Act.
  • Available under Shatabdi deposit scheme upto September 2006.
  • Available under Shatabdi deposit scheme.


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