How to Withdraw a Fixed Deposit for Tax Saving 5 Years in Case of the Death of the Customer
Managing a fixed deposit (FD) for tax-saving purposes can be quite convenient, but what happens when the customer passes away? In this guide, we explore the steps nominees and legal heirs need to follow in such cases. This includes how to initiate the process, the necessary documentation, and the various avenues for recourse in case of bureaucratic hurdles.
Approval and Process Overview
According to guidelines from both the Income Tax (IT) Department and State Bank of India (SBI), beneficiaries and the legal heirs can withdraw the amount from a fixed deposit account in the case of the customer's death. However, some banks and financial institutions may face system restrictions that prevent them from directly closing the FD account. In such scenarios, they typically request the nominee or legal heir to follow a set of procedures to facilitate the withdrawal of funds.
Communication with the Bank
One of the initial steps is to communicate with the bank. You can either call the customer care line or send an email to the bank's customer care email address provided on their official website. Alternatively, you can utilize the online complaint facility that many banks offer. This is crucial as the bank will need to verify the identity and legitimacy of the request to proceed with the withdrawal.
Complaint to Banking Ombudsman
If you are unsatisfied with the settlement offered by the Banking Ombudsman, you have the option to make an appeal to the Appellate Authority. Additionally, consulting a legal advocate and lodging a complaint under the Consumer Protection Act is another viable option if you feel your rights as a beneficiary or legal heir have been violated. For more detailed information on these processes, please refer to the link provided on how to file a complaint against your bank.
Key Steps for Nominees and Legal Heirs
1. **Inform the Bank:** The person who inherits the fixed deposit or the legal heirs should inform the bank of the account holder's death, providing the account number. The registered nominee can also inform the bank. The bank will usually request the original death certificate and other account-related documents from the nominee for verification.
2. **Joint Account Handling:** For joint accounts, the surviving partner can seek the removal of the deceased's name and become the sole operator of the account. Typically, once the bank receives the death notice, it will write to the nominee to request additional documentation.
3. **Nomination Details:** If a nomination has been made, the nominee can proceed to withdraw the funds by submitting a simple application to the bank. The application should include the details of the deceased and the fixed deposit, specifying the nominee's role. Once the bank confirms the nomination, the amount will be credited to the nominee's account.
4. **No Nomination:** If no nomination has been made, the legal heirs will need to complete a claim form provided by the bank. After filling and submitting the form, the fixed deposit amount will be credited to the heir's savings bank account.
5. **Visit the Home Branch:** For a smoother process, it is advisable to visit your home branch. Meeting with the officer or manager can provide more personalized assistance. You must bring the original fixed deposit receipt and the deceased customer's death certificate. The bank will then inform you if there is a nomination or not, and proceed accordingly.
**Suggested Advice:** It is advisable to convert all individual accounts into joint accounts, especially for married couples, to prevent such complexities in the future.
By following these steps, you can effectively manage the withdrawal of a fixed deposit in the case of a customer's untimely death. The process may seem daunting at first, but with careful documentation and perseverance, you can successfully claim the tax-saving amount.
To learn more about the processes involved and for detailed guidance, visit the official links provided by financial institutions and government bodies.