From making use of surplus funds to planning short-term and long-term financial goals, Fixed Deposits (FDs) cater to a wide range of financial needs. When you have different financial objectives, you might consider opening different FDs to meet them. In such cases, linking different bank accounts for FDs is quite common.

Linking an FD with the right payout account is essential for timely interest and payout credits as well as easier tracking. When you have multiple FDs, linking them with different accounts will give you a clear overview of how each FD is performing.

This article explains what a customer profile is and how multiple FDs fall under one profile, linking bank accounts for FDs, whether you can link different bank accounts to multiple FDs, and rules, limitations, and common mistakes you should be aware of.

Understanding FD Customer Profile

When you open an FD for the first time, the bank or Non-banking Financial Company
 (NBFC) collects your primary information along with the KYC documents. The collected data is used for creating a unique customer profile. This FD customer profile acts as a central record that the bank or NBFC uses to track all FD accounts you hold.

So, whenever you create an additional FD, the bank or NBFC maps it under the same profile instead of creating a new one every time. And all the FDs under the same profile are treated as individual contracts with their very own interest, tenure, and payout options. This makes it easier for you to manage them all in one place.

Since there are no limits on the maximum number of FDs an individual can have, you can have multiple FDs under one customer profile.

Linking Bank Accounts for FD

Every FD you open must be linked to a bank account. The linked bank account is necessary to receive

• Interest payouts
• Maturity proceeds
• Premature withdrawal accounts

This FD bank linking is done at the individual FD level, meaning each FD should be linked individually to one bank account. You can decide whether to use the same bank account for all FDs or to have a different bank account for each FD.

Why Having Different Bank Accounts for Multiple FDs is a Good Idea

As explained earlier, you can link different bank accounts to different FDs under the same customer profile. This approach is useful, especially when you want to keep funds earmarked for separate goals.

For example, let us say you have two different FDs to meet two different needs. One FD is created to give you a regular monthly income, and the other one is added as part of your retirement savings. In this scenario, the payouts from the FD made for the income plan should ideally be credited to the bank account where you have your regular monthly transactions. And the payouts from retirement FD should typically go to an account that would be untouched or have very minimal transactions. This approach would be ideal to manage both your FD accounts better and know what is happening with them better.

FD Account Options and Payout Preferences

Let us now see about selecting the FD payout account and choosing your payout preferences while creating an FD. You can customise each FD to suit your needs using these options.

• Choosing payout account: Choose the bank account where you want the interest payouts and maturity amount to be credited. Selecting the right account helps ensure smooth transfer of funds.

• Choosing payout preferences: FDs usually let you choose between cumulative and non-cumulative payout choices.

  • In cumulative FDs, interest will be added to the principal and paid off at maturity.
  • In non-cumulative FDs, interest will be paid on a regular basis. In this case, you have to select the payout frequency, like monthly, quarterly, or annually.

In simple terms, the linked payout account determines where the interest and maturity proceeds are credited. The right payout structure helps meet your financial goals.

Updating or Changing the Linked Bank Account

Although you’ve added a payout account while creating an FD, you may need to change or update the FD payout bank account later. This happens when the previous account you linked is closed or inactive, or when you have switched your primary or salary account, or you just need payments to be credited to a different account.

You can change the FD withdrawal account at any time before maturity. The bank account will be linked after verification. But make sure you raise such requests earlier to avoid payment delays.

Rules, Limitations, and Common Mistakes

Though it is a common practice to link new bank accounts and change existing ones, you should be aware of these dos and don’ts to ensure timely payments to the right account.

Keep all these in mind before an FD payout account update.

Conclusion

You can easily manage multiple fixed deposits under one customer profile when you clearly plan how payouts are routed. You can organise your FDs properly by linking the right bank accounts to individual FDs and choosing suitable payout options.  In case of changes in payout accounts, update them on time with accurate details to avoid payment delays.

Shriram Finance allows you to manage multiple FDs more easily under one customer profile. Visit our website to get started on your FD journey today and enjoy steady returns.

FAQs

1. Can I have a different bank account for each FD?

Yes, you can have different bank accounts for each FD, even if they are under the same profile.

2. How many bank accounts can I link?

Each FD can have only one bank account linked to it. However, you can use different accounts for different FDs.

3. Is verification required for each new account?

Yes, the bank account will be added only after successful verification.

4. Can I change my bank account linked to the FD later?

Yes, you can change the bank account linked with the FD any time before maturity.

5. Can I view all FDs under one customer ID?

Yes, all the FDs you hold fall under the same customer profile. You can view them under one customer ID.