Green Fixed Deposits

How Does a Green Fixed Deposit Work? 

Green Fixed deposits are quite similar to a regular fixed deposit. The only major difference is regarding how the fund is utilised. Here, the money is channelled to finance eco-friendly initiatives. The initiatives are aimed at promoting renewable energy and other environmentally friendly projects, such as solar power projects, organic farming, etc. 

Features of Green Fixed Deposits 

A green fixed deposit offers many attractive features to its customers. The major features of the green fixed deposit are as follows: 

1. Senior citizens are eligible for a 0.25% extra interest rate for deposits up to Rs.2 crore. 

1. An extra 0.1% interest rate per annum is applicable for online deposits up to Rs.50 lakh. 

1. Both corporate and retail customers can open green fixed deposits. 

1. Green fixed deposits up to Rs.5 lakhs are insured. 

1. The tenure of green fixed deposits is 18 months to 10 years. 

1. Premature withdrawal is allowed after the first three months of opening a green fixed deposit. 

1. For premature withdrawal after 6 months of opening the account, a 1% penalty is charged. Premature withdrawal after 6 months can also lead to your green fixed deposit turning into a regular fixed deposit account. 

1. The use of the overdraft facility can also convert your green fixed deposit to a regular fixed deposit account. 

Benefits of Green Fixed Deposits 

Opening a green fixed deposit offers various benefits to its customers. Listed below are the main advantages of a green fixed deposit. 

1. A green fixed deposit offers all the facilities that a regular fixed deposit offers. On top of that, your investment will be used to support eco-friendly projects, which will in turn largely benefit the environment. 

1. Green fixed deposits offer high interest rates that vary depending on the bank. The high interest rate assures profitability for the investor. 

1. Opening a green fixed deposit also helps you diversify your portfolio, as your investment not only benefits you, but also the environment. 

Eligibility Criteria for Fixed Green Deposit 

The eligibility criteria for opening a green fixed deposit vary from bank to bank. Generally, individuals, corporations, members of the Hindu Undivided Families (HUFs), non-profit organisations, societies, etc., can open a green fixed deposit account. 

Documents Required for Green Fixed Deposits 

The documents required for green fixed deposits are similar to that of a regular fixed deposit. The documents necessary to open a green fixed deposit for individual and corporate investors are as follows: 

Individual Investors 

1. Aadhaar 

1. PAN card

1. Address proof 

1. Passport-size photographs 

1. Income proof (applicable for deposits below Rs.10 lakh) 

Corporate Investors 

1. Authorised signatory details 

1. Certificate of incorporation 

1. GST registration certificate 

1. Board resolution