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A common investment option that many individuals opt for is a Fixed Deposit (FD). Investing in an FD account comes with low risks and a guaranteed pay-out. FDs offered by certain banks come with higher interest rates when compared to regular savings accounts. The account can be opened either jointly or as a single-holder account.
Certain times, the main account holder may pass away before the FD matures. In such cases, it is important that family members know the process to claim the principal account as well as the interest that has been accumulated. Depending on the type of FD account, the process to claim the amount will vary.
Depending on the type of joint account, the procedure to claim the FD amount will vary. Given below are claim procedures for commonly-opened joint accounts:
Latter or Survivor: Under this type of joint account, the FD account can be operated by the second account holder and he/she will become the prime holder. The first holder can access the funds only if the second holder passes away.
The nominee will get the principal amount and the interest that has been accumulated only if both depositors die. In case no nominees have been added to the account, the legal heirs can access the FD amount.
Former or Survivor: Under this account, the second holder can withdraw the FD amount only if the first holder passes away. The first account holder’s death certificate must be submitted by the second account holder to access the funds.
In case both account holders have passed away, the nominee can withdraw the funds. If no nominee has been added, the FD amount that is available can be withdrawn by the legal heirs.
Anyone or Survivor: In case the FD account has over two holders, the balance that is available along with the interest that has been accumulated will be provided to the survivors if an account holder/ holders passes away. The nominee will be given the amount in case all account holders die.
In case one or more account holders have passed away and no nominees have been added, the depositors who are alive and the legal heirs of the account holders, who have passed away, will receive the funds. The legal heirs of the account holders will receive the funds in case all depositors die and no nominees have been added.
The process to withdraw the FD amount will differ based on the type of account being held. Here are the withdrawal procedures for commonly-opened single-holder FD accounts:
It is important to choose the right FD account so that the withdrawal process can be easier. Individuals must inform the nominee/nominees about the terms of the account as well.
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