In banking, FDR most commonly refers to a Fixed Deposit Receipt, which serves as proof of investment in a fixed deposit account.
Here's a breakdown:
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Definition: A Fixed Deposit Receipt (FDR) is a document issued by a bank or financial institution to a customer upon opening a fixed deposit account. It's essentially a receipt that confirms the deposit.
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Purpose:
- Proof of Deposit: The FDR acts as official confirmation that you have deposited a specific amount with the bank for a fixed period.
- Details of Investment: It contains crucial information regarding your investment.
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Key Information Included on an FDR:
Information Description Deposit Amount The principal amount you deposited. Interest Rate The interest rate applicable to your fixed deposit. Maturity Date The date on which your fixed deposit will mature. Maturity Amount The total amount you will receive upon maturity (principal + interest), if applicable. Account Holder Name The name(s) of the person(s) in whose name the fixed deposit is held. Bank Details The name and branch of the bank where the fixed deposit is held. FDR Number A unique identification number for the specific fixed deposit. Terms and Conditions Briefly outlines the terms associated with the deposit, including premature withdrawal penalties. -
Importance: Keep your FDR safe, as you will need it to claim the maturity amount. Banks also often allow you to use the FDR as collateral for loans.
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Alternatives: While a physical FDR is common, some banks now offer e-FDRs (electronic Fixed Deposit Receipts) that are accessible online. These serve the same purpose but are stored electronically.
It is crucial to understand that FDR refers to a document, not the deposit itself. The fixed deposit is the actual investment. The FDR is simply the proof of that investment.