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Budget 2023
Budget 2023

‘Either or survivor’ clause in bank FDs a myth; surviving joint-holder has a Herculean task on hand

Many banks and even financial planners advise their customers investing in fixed deposits of banks to opt for the ‘either or survivor’ clause. The problem arises when one of the joint-holder(s) dies during the tenure of the deposit, and the surviving joint-holder(s) approach the bank to liquidate the FD.

January 05, 2023 / 09:42 AM IST
The mainstream belief is that central banks will reverse course after a period of consolidation. (File image)

The mainstream belief is that central banks will reverse course after a period of consolidation. (File image)

“RBI Kehta Hai – Jaankar Baniye, Satark Rahiye!”

You couldn’t have missed this punchline in customer alert campaigns on television (TV) during Kaun Banega Crorepati or various other shows and TV series. So, who needs to be alert ― the bank or the customer? Let us explain.

The last quarter of CY2022 saw an aggressive drive by banks to garner fixed deposits (FD) on the back of increased interest rates. Retirees and pensioners prefer bank FDs, thanks to the security of principal amount, ease of operation, and instant liquidity. However, they do not seem to be aware that it is an unsecured instrument.

FD forms across banks are standardised with operating instructions and terms such as “Either or Survivor” “Jointly”, over and above “Self”, “Anyone or Survivor”, “Minor – operated by guardian” and “Others (Specify)”.