If you’ve ever opened a fixed deposit (FD) and later thought, “I should move this FD to my spouse, daughter, or parent,” you’re not alone. Deposits remain a primary way Indian households save. RBI publications on household financial savings consistently show bank deposits as a significant component of overall financial savings.
However, one important point to remember: in most banks an FD is not a freely movable asset that can be reassigned midway through its term.
Can a fixed deposit be transferred to another person?
In everyday banking practice, directly changing the owner’s name on an active FD is usually not permitted. Banks treat an FD as a contract issued in the depositor’s name, and changing ownership before maturity normally requires closing that contract and opening a new one in the new owner’s name.
FD maturity rule of thumb: “FD ownership can generally only change after maturity.”
That simple line captures how this works in practice. At maturity, you can decide where to direct the proceeds, and that is when a change of ownership becomes straightforward.
Practical ways people “transfer” an FD
1) Close the FD (or do a premature closure) and open a new FD in the other person’s name
This is the most common and practical approach when someone asks whether an FD can be transferred from one person to another.
What happens:
- You request premature closure if the FD has not yet matured.
- The bank will credit the amount after applying any applicable penalty or reduced interest for the shorter tenure based on the account’s terms.
- You then open a new FD in the transferee’s name.
Example
Rohit has a ₹2,00,000 FD at 7.2% for 24 months. After 10 months he wants the FD in his daughter’s name for her college expenses. The bank may permit premature withdrawal but will apply the bank’s premature withdrawal rules, and Rohit can then open a fresh FD in his daughter’s name.
Tip: This is a clear and reliable process, but always check the premature withdrawal terms first because earned interest may be reduced.
2) Use nomination (only for transfer on death, not during your lifetime)
Nomination exists to ease claim settlement for family members if the depositor dies. Banks are required to offer nomination, register it correctly, and show nomination status on term deposit receipts.
Important clarification: A nominee is not the owner of the FD during the depositor’s lifetime; the nomination simply facilitates later settlement of the proceeds.
Therefore, an FD can be transferred to another person via nomination only in the context of settling the deposit after the depositor’s death—not as a mechanism to change ownership while the depositor is alive.
3) Add a joint holder (only if allowed and usually at account opening)
Some banks allow FDs to be opened jointly (for example, Either/Survivor or Former/Survivor options). Converting an existing single-holder FD into a joint FD during the term is bank-dependent and often requires closing the original FD and opening a new joint FD. If your goal is family convenience, opening a joint FD from the start may be a better option than attempting to transfer ownership later.
Steps to transfer an existing FD (practical checklist)
When customers search for steps to transfer an existing FD, their objective usually falls into one of two categories: (a) transfer ownership of the funds to another person, or (b) transfer the FD’s servicing branch or account. Below is a straightforward, low-risk checklist for the ownership-transfer route (close + reopen):
- Determine the purpose: Are you changing ownership, or merely transferring the FD’s servicing branch/account?
- Check premature closure terms: Penalties and reduced interest vary by bank and FD scheme; confirm the applicable rules before proceeding.
- Complete KYC for the transferee (when opening a new FD):
- Aadhaar
- PAN
- Address proof
- Photograph
- Any other documents required by the bank
- Submit the transfer plan: Close the existing FD, transfer the proceeds to an account, and open a new FD in the transferee’s name.
- Retain records: Keep the FD receipt, closure confirmation, and the new FD receipt for your records.
These are the practical steps most account holders will need to follow to effect a transfer of FD ownership.
Frequently asked questions on FD transfer
1) Can I transfer my FD to my daughter?
You cannot directly change ownership of an active FD to your daughter. The common process is premature closure of the FD, transfer of proceeds, and opening a new FD in her name. Alternatively, you can name her as nominee to simplify settlement after your death, but nomination does not transfer ownership during your lifetime.
Remember: “FD ownership can generally only change after maturity.”
2) Can we transfer an FD from one branch to another?
Many banks can reassign the servicing branch for an FD because of core banking systems. This is an operational or servicing transfer, not an ownership transfer. Procedures and forms vary by bank, so check with your branch.
3) Can I transfer an FD to another account within the same bank?
If your question is whether you can move FD funds to another account, that is normally done at maturity by choosing where the maturity proceeds should be credited, or earlier via premature closure. Once funds are in a savings or current account, banks allow intra-bank transfers through standard fund-transfer channels.