FDR stands for Fixed Deposit Receipt in banking. It is an official document issued by a bank when a customer opens a Fixed Deposit (FD) account. The FDR serves as proof of the deposit and contains all essential details related to the FD. Since fixed deposits are one of the most popular investment options in India, the FDR becomes an important document for record-keeping, withdrawals, loan facilities, and premature closure.
What Is a Fixed Deposit Receipt (FDR)?
A Fixed Deposit Receipt is a certificate provided by the bank confirming that a customer has deposited a certain amount for a fixed tenure at a predetermined interest rate. It acts as an acknowledgment of the deposit and includes crucial information such as FD amount, maturity date, interest rate, tenure, and terms of withdrawal.
The FDR ensures transparency and offers customers a clear reference in case they need to make changes to their deposit or use it for securing loans.
Key Details Included in an FDR
1. Deposit Amount and Tenure
The receipt clearly mentions the principal amount deposited and the duration for which the FD has been opened.
2. Interest Rate and Maturity Value
It includes the rate of interest applicable and the final maturity amount the customer will receive after the tenure is completed.
3. Customer and Account Information
Details such as the depositor’s name, FD account number, and nominee information are included.
4. Terms and Conditions
This section covers rules regarding premature withdrawal, penalties, auto-renewal, and maturity instructions.
Importance of FDR in Banking
An FDR is an important financial document for customers. Banks use the FDR to verify ownership when the customer requests premature closure or renewal. Customers can also use the FDR as collateral to avail loans against fixed deposits, making it a secure and convenient option for emergency funds.
The FDR also ensures transparency and acts as a legal record in case of disputes. With the shift towards digital banking, many banks now issue e-FDRs, which offer the same validity and convenience without the need for physical documents.