Bank fixed deposit.

Manoharan - (Querist) 13 February 2025 This query is : Resolved
I have put an FD in a Scheduled bank on quarterly interest and after 3 months I have got interest. Due to some personal reason, after 4 months from the date of deposit, I have asked the bank staff to convert the deposit as cumulative. Instead of product change, they have reduced interest by 1.5% from the original interest and paid the interest in the method of preclosure of deposit they have calculated and I have put to a loss.
Some expertvmay kindly offer their opinion on this.

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Quick Summary

A bank customer experienced a significant loss after requesting to change their fixed deposit from quarterly interest to cumulative. The bank reduced the interest rate by 1.5% and applied pre-closure terms, resulting in a financial loss for the customer. While RBI guidelines exist, the bank's specific scheme rules and actions led to this outcome. Seeking clarification from the bank or escalating to the Banking Ombudsman are potential next steps.

kavksatyanarayana (Expert) 13 February 2025
As per RBI guidelines, the interest will be paid and there is such a difference in fixed deposits. However, you can ask for the variation in interest rates through RTI.

T. Kalaiselvan, Advocate (Expert) 14 February 2025
Since you opted for a different scheme under fixed deposit the prevailing law for such conversion would be applicable, you may first ascertain the details and then plan to proceed legally.

P. Venu (Expert) 18 February 2025
It is only the Bank who can clarify. if their clarification is unnecessary, you may take up the issue with the Banking Ombudsman.

Sudhir Kumar, Advocate (Expert) 19 February 2025
This forum cannot be spokesperson of the Bank.

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