Know the RBI guidelines about Interest Payment on Fixed Deposit Maturing on Holiday – What does RBI say about the interest payment on Term Deposit or Fixed Deposit Matured on Holiday or any non business day ? Will you get the interest for that day from your bank ? let’s understand the RBI guidelines regarding this :
“Interest payment of Fixed Deposit if due date of payment is a holiday or a non-business working day”:
“When a deposit due date of payment is a holiday or a non-business working day, interest at the originally contracted rate should be paid for the intervening holiday/s / nonbusiness working day, irrespective of whether the depositor seeks repayment on the succeeding working day or later on.
Interest so payable, as above, should be on the maturity value in the case of reinvestment deposits and RDs (Recurring Deposits) and on the original principal amount in the case of ordinary FDRs (periodical interest paid already)”.
As per point no. 4 (g) of RBI Master Direction on Interest Rate on Deposit 2016 (Updated as on July 02, 2021) on
“Deposits maturing on Holiday/non-business working day”:
(i) If a term deposit is maturing for payment on a Holiday/non-business working day, Scheduled Commercial Banks shall pay interest at the originally contracted rate on the original principal deposit amount for the Holiday/non-business working day, intervening between the date of the maturity of the specified term of the deposit and the date of payment of the proceeds of the deposit on the succeeding working day.
(ii) In case of reinvestment deposits and recurring deposits, Scheduled Commercial Banks shall pay interest for the intervening Holiday/non-business working day on the maturity value at the originally contracted rate. All branches/offices are instructed to take note of the above for strict compliance.