What is the procedure for the withdrawal/ closure of an FD if it is opened jointly?

Withdrawing or closing a joint fixed deposit (FD) requires the agreement and signatures of all account holders, as well as following the financial institution’s legal procedures.

If one holder has passed away, the surviving holder(s) must provide the necessary documents to access or close the FD.

1. Mutual Consent of Joint Holders: All joint holders must mutually agree to withdraw or close the FD. The Non-banking Financial Companies (NBFCs) generally require a withdrawal mandate signed by all holders, per Reserve Bank of India (RBI) guidelines. This ensures transparency and prevents unauthorised actions.

2. Submission of Documents: The primary holder or all joint holders, depending on the bank’s or NBFC's operational instructions, typically need to submit:

• A duly filled FD withdrawal or closure form.
• Identity proof (e.g., Aadhaar, PAN, or passport) for all holders.
• The original FD receipt or certificate, if issued.
• A joint mandate letter, if not pre-specified in the account terms.

3. Operational Instructions: The FD account’s operation mode determines who can initiate the process. For “either or survivor,” the primary holder may act alone, but banks or NBFCs often seek consent from all holders for premature closure.

4. Tax Considerations: Interest earned is taxable, and the primary holder is generally responsible for reporting it. For premature withdrawal, banks or NBFCs may deduct a penalty and adjust the interest rate, impacting the final payout.

5. Processing and Payout: Once documents are verified, the bank or NBFCs process the request, and funds are typically credited to the linked joint account or in the agreed payout mode.