Federal Savings Fund is a type of recurring deposit scheme that helps people save a certain sum of money every month and earn interest on the same. People can choose to deposit money in the account for a maximum of 10 years.
- Individuals are eligible to open this account.
- In case of minors, the parents/guardians can open the account.
- HUF, proprietorship, associations, clubs, firms, joint stock companies and any other entity that is not forbidden by the RBI can open this account.
Features of Federal Savings Fund:
- The minimum amount of deposit for Federal Savings Fund is Rs.50. The additional contributions have to be made in multiples of Rs.10.
- The minimum tenure for which people can deposit money in this account is 6 months and the maximum tenure is 10 years.
- People can choose to open a joint account.
- This scheme does not have a limit on the maximum deposit amount.
- Depositors can choose to activate the Standing Instruction facility for this scheme. It will allow the installment amount to be transferred automatically from your savings account to this account by the due date.
- The interest that depositors earn will be paid to them on maturity of the account.
- Depositors can choose to avail a loan against this recurring deposit account.
Interest Rates for Federal Savings Fund Scheme:
|6 months - below 1 year||7% p.a.|
|1 year - 3 years||7.5% p.a.|
|Over 3 years||7.25% p.a.|
Additional 0.5% interest rate is offered by the scheme to senior citizens.
The rates may be changed at any time at the bank’s discretion.
Fees and Charges:
|Delay in installments (if it is not paid by the due date and 10 days grace period)||Rs.1 for each Rs.100 per month (subjected to a minimum of Rs.10)|
|Premature account closure (if you close your RD account within 1 year)||Rs.150|
The fees and charges may be changed at any time at the bank’s discretion.
Application Process for Federal Savings Fund Account:
Customers can choose to open a Federal Savings Fund Deposit account online and offline. To apply for this account online, they need to have a FedNet- Internet Banking Account. If they do not have the interest banking service activated for their account, then they have to visit the bank’s branch and apply in person.