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Home >> Deposit Schemes >> Tax Saving Term Deposit
Tax Saving Term Deposit



Name of the scheme:


Oriental Bank Tax Saving – Term Deposit Scheme

(u/s 80C of Income Tax Act 1961)


Who can deposit under the scheme:


An individual or a Hindu Undivided Family (HUF) having Permanent Account Number (PAN) can make deposit under the scheme.


Type of Deposit


The deposit can be either in the form of Fixed Deposit or Cumulative Deposit


(a) Single holder type deposit -

The single holder type deposit receipt shall be issued to an individual for himself or in the capacity of the Karta of the Hindu Undivided Family (HUF).


     (b) Joint holder type deposit –

        The joint holder type deposit receipt may be issued jointly to two adults or jointly to an adult and a minor, and payable to either of the holder or the survivor. Provided that in the case of joint holder type deposit, the deduction from income under section 80C of the Income Tax Act shall be available only to the first holder of the deposit.


Fixed Deposit:


Fixed deposit can be issued with monthly or quarterly interest payment option.


Cumulative Deposit:


Interest is compounded at quarterly rests and payable with principal on maturity.


Amount of Investment:


The depositor can invest any amount not exceeding Rs. 1.50 lacs (One Lac Fifty Thousand Rupees) in a financial year, minimum being Rs. 100/- and in multiple thereof.


Period of deposit

The period of deposit shall not be less than five years.


Premature payment


The lock in period under the scheme shall be five years; as such the terms deposit cannot be encashed before the expiry of five years from the date of deposit, except in case of death of depositor. In the event of the death of the depositor, premature payment of deposit can be allowed to nominee/ legal heirs as per policy of bank, which as of now is as follows;


i)             If the deposit is accepted before 26.12.2006, interest shall be paid at the applicable rate for the period, deposit remained with the bank.

ii)            If the deposit is accepted on or after 26.12.2006, no interest shall be paid if prematurely encashed within 7 to 30 days.

iii)           If the period of deposit is more than 30 days to less than 5 years, the rate of interest payable shall be as per normal domestic term deposits, for the period, the deposit remained with the bank, as applicable on date of contract/ deposit or the date of payment whichever is less, subject to the applicable extra benefit of 0.50% for Senior Citizen/ as advised by Head Office from time to time, without penalty. However, in any case the rate of interest payable shall not be more than the contracted rate.


Rate of Interest


For other than Senior Citizens:  The interest rates offered on other term deposits for a period of 5 years – 10 Years Bucket.


For Senior Citizens:  0.50% over the rate for Other than Senior Citizens



Issue of Deposit Receipt:


The deposit receipt shall signify Name of Scheme besides Name, Address, and Permanent Account Number (PAN) of depositor along with the other usual particulars like date, period, amount, rate of interest, maturity date, maturity value in case of Cumulative Deposit receipt or periodicity of payment of interest (monthly or quarterly) in case of Fixed Deposit receipt.


Pledge of Deposit Receipt


The Tax Saving Deposit receipt shall neither be pledged to secure loan of any sort nor as security to any other asset. In other words, no advance of any nature, including by way of collateral security; to secure any asset, advance, guarantee or L/C can be allowed against pledge / lien of the deposit receipt/s.


Renewal of term deposit:


Renewal of Term Deposit in this scheme on maturity shall be as notified by the Government and in force from time to time. However, renewal will be allowed in general term deposit scheme i.e. by transferring the amount from this scheme to the general term deposit scheme but without Income Tax exemption.


Replacement of lost or destroyed term deposit receipt:


a)    If a term deposit receipt is lost, stolen, destroyed, mutilated or defaced, the person entitled thereto may apply to the issuing branch for the issue of a duplicate receipt.

b)    A statement showing particulars, such as number, amount and date of the receipt, and the circumstances attending such loss, theft, destruction, mutilation or defacement, shall accompany every such application.

c)    If the Branch Incumbent is satisfied of the loss, theft, destruction, mutilation or defacement of the term deposit receipt, he shall issue a duplicate receipt, on applicant furnishing an Indemnity Bond in the prescribed form, with one or more approved sureties or with a bank guarantee. The fact ”duplicate receipt issued in lieu of lost receipt no….………..” will be mentioned on the face of such receipt.


     Cases where the deposit receipt is for Rs. 500- or less/ deposit receipt is    mutilated or defaced, shall be dealt with as follows:


i)     Cases where the amount of the deposit receipt lost, stolen, destroyed, mutilated or defaced is five hundred rupees or less, a duplicate receipt or receipts may be issued, on the applicant furnishing an indemnity bond without any such surety or guarantee.

ii)   Cases where such application is made with respect to a receipt mutilated or defaced, of whatever face value, a duplicate receipt may be issued without any such indemnity bond, surety or guarantee, if the mutilated or defaced receipt is surrendered and the receipt is capable of being identified as the one originally issued.


d.) A duplicate receipt issued as per (c) above shall be treated as equivalent to the original receipt for all the purposes of this scheme except that it shall not be encashable at a branch or the bank other than the branch at which such receipt is issued without pervious verification.




a)    Under the scheme, the single holder or the joint holder of a Term Deposit may nominate only one person who in the event of death of the single holder / both the joint holders, as the case may be shall become entitled to the deposit and to the payment due thereon.

b)    The name of the nominee, as the case may be, must be mentioned on the face of deposit receipt.

c)    No nomination shall be made in respect of a term deposit applied for and held by or on behalf of MINOR.

d)    In the event of the death of the holder of a term deposit in respect of which the nomination is in force, the nominee shall be entitled at any time before the maturity or after the maturity of the term deposit to encash the term deposit, as per bank’s norms.

e)    For the purpose of payment, the nominee shall make an application to the Branch Manager, supported by proof of death of the holder.


Payment to Legal Heirs


If holder of a term deposit dies and there is no nomination in force at the time of his death, his/ her legal heirs are entitled to claim the sum due to the deceased, as per bank’s norms.


Transfer from one branch to another


The term deposit account can be transferred from one branch to any other branch, on the depositor making an application, at either of the two branches. Every such application shall be signed by the holder of the term deposit receipt.


Income Tax Exemptions:


§  The principal amount is tax exempted under section 80C of the Income Tax Act, 1961 (43 of 1961) subject to the overall ceiling of Rs. 1.50 lac, along with investment in other schemes like PF, PPF, NSC, Insurance Premium, and Infrastructure Bonds etc.

§  Interest on these deposits shall be liable to tax under section 194A or section 195 of the Income Tax Act. Accordingly, the interest amount is liable to TDS.

§  15H / 15G wherever applicable as in case of other term deposit schemes and as per Government guidelines.