Several significant changes to Fixed Deposit (FD) rules have been introduced in 2025. These updates will affect both general and senior citizen investors.
Understanding these changes can help you manage your FDs more effectively, ensuring your savings grow while staying secure.
The Reserve Bank of India (RBI) has made these adjustments to improve transparency, security, and flexibility for FD holders. Here’s an overview of the major updates.
Revised TDS Rules for 2025
For General Citizens
The TDS (Tax Deducted at Source) limit on interest earned from FDs has been increased from ₹40,000 to ₹50,000 per year. This new rule takes effect from April 1, 2025.
For Senior Citizens
Senior citizens will benefit from a higher TDS limit, which has been raised from ₹50,000 to ₹1,00,000. This helps reduce the burden of TDS deductions on their FD earnings.
Note: If you don’t provide your PAN, TDS will be deducted at a higher rate of 20%. TDS is only applied when the interest earned exceeds the set limits.
New Partial Withdrawal Rules
Starting from January 1, 2025, FD holders can make partial withdrawals without losing interest on the remaining balance. Here’s how it works:
1) You can withdraw up to 50% of your FD amount or a maximum of ₹5 lakh (whichever is lower).
2) These partial withdrawals will not earn any interest.
3) The remaining deposit will continue to earn interest based on the current FD rates.
Other Important Changes
FD Maturity Rules
If your FD is not renewed after it matures, the amount will earn interest at the same rate as a savings account.
To avoid losing out on better interest rates, make sure to track your FD’s maturity date and renew it on time.
Other TDS Updates
Securities Interest: TDS limit increased to ₹10,000.
Dividends: Exemption limit for dividends raised from ₹5,000 to ₹10,000.
Insurance Agent Commissions: Limit increased from ₹15,000 to ₹20,000.
Brokerage Commissions: TDS limit raised from ₹15,000 to ₹20,000.
Technical Services: TDS limit increased from ₹30,000 to ₹50,000.
