Can Fixed Deposits Be Transferred to Another Person in India?

Can Fixed Deposits Be Transferred to Another Person in India?

April 11, 2026

What is a Fixed Deposit?

Fixed Deposit (FD) is one of the widely used forms of investment in India provided by banks and NBFCs. It helps the investor deposit a lump sum amount with a set interest rate and period.

The FD accounts are favored by individuals who desire low-risk and assured income sources. The tenure could vary from a couple of days to several years; any early withdrawal would mean penalty for the depositor.

Upon opening the FD account, the bank provides a document or electronic proof that is known as the Fixed Deposit Receipt. People have the general perception that fixed deposit receipt is transferable, but in actuality, the FD account in India cannot be transferred. This knowledge is necessary to delve into further discussion regarding ownership.

Can Fixed Deposits Be Transferred to Another Person in India?

The fixed deposit cannot be transferred directly to another individual during its period. The fixed deposit will still be tied up with the original account holder(s).

But some of the options available include:

• Adding a joint account holder (depending on the policies of the bank)
• Naming a nominee (for future purposes)
• Closing the FD and creating a new fixed deposit under another name
• Taking legal means such as gifting and assignment in special circumstances

To sum up, ownership cannot be transferred directly, but the advantage can be transferred through other methods.

Ways to Transfer or Share FD with Another Person in India

As direct transfer of ownership is not possible, many try to find means to pass on the benefits of the FD to another person. Although the process is rather complicated, there are certain methods through which banks permit this action.

Some of the most common methods are:

• Adding a Joint Holder – One of the easiest means is opening the FD account jointly with another person or, in certain instances, adding the other party to the account later after receiving approval from the bank. Both parties will have access to the account. The operational mode determines how either party accesses the FD account. In cases of maturity or unexpected occurrences, the second party can easily access the FD. This does not change ownership fully but allows shared control.
• Nomination Facility – Nominations are common practices employed to transmit FDs. Nominations can be made during account creation or after. In the event of depositor death, nominations have the right to claim FD amounts. It guarantees seamless transfer without any legal hassles. However, nominations are simply receivers and not owners during the depositor’s lifetime.
• Premature Withdrawal & Reinvestment – This is the most straightforward approach to consider if total control needs to be transferred. First, close the FD account that is yet to mature. Then, transfer the money into your savings account. Finally, invest the money again in the other individual’s name. This approach addresses a practical way of how to transfer fixed deposit from one person to another, even though it requires closing the original FD. There might be a penalty for this, so it’s better to check the details first before proceeding.
• Gift or Assignment (In Some Cases) – In some instances, mainly involving corporate FDs or particular schemes, it is possible to transfer the FD to another individual. This typically involves formal procedures and bank approval. Not all banks offer such options for regular deposit accounts. There are fewer instances of this kind, but it is possible under particular circumstances.

Hence, even if you are not able to transfer fixed deposit to another account under another name without withdrawing the money, these ways would suffice.

Bonus Topic: Can Fixed Deposits Be Transferred to Another Country?

This is another field where people usually get confused, particularly non-resident Indians (NRIs) or people intending to leave the country.

To put it plainly, the fixed deposit that you make in India will not be able to be shifted or moved overseas. The banks do not permit the international movement of the active fixed deposit account in its current state.

Therefore, if you’re wondering can fixed deposit be transferred to another bank outside India, the answer is no in a direct sense. Similarly, can I transfer fixed deposit from one bank to another across countries is also not permitted while keeping the FD intact.

But, here are some practical options available to you based on your circumstances:

What you can do instead:

• Close the FD early and shift the balance into your savings bank account
• Send the money overseas through appropriate banking methods (in compliance with FEMA rules)
• Make another FD in an overseas country or open an NRI FD (NRE or NRO)

For NRIs or relocating individuals:

• Existing resident FDs can be reclassified as NRO deposits
• Repatriation is permitted up to stipulated limits
• Transfers of funds across borders might be subjected to documentary proof by banks

Another aspect is that the fixed deposit is transferred to another bank of India, and from there it gets transferred out of the country. However, even here, the fixed deposit does not get transferred directly but has to be closed and then moved through banks.

Hence, although it is not possible to transfer fixed deposits from one country to another directly, it is possible to move them indirectly through banks.

How To Transfer Fixed Deposit to Another Bank Account?

A fixed deposit cannot typically be transferred from one bank to another in its active form. If you are trying to understand can fixed deposit be transferred to another bank, then the simple fact is that the fixed deposit does not get transferred, but only the maturity value.

In most cases, the following steps are involved:

• Close or prematurely withdraw the FD: The account holder makes the request via net banking, mobile banking, or visiting the bank branch. According to the Reserve Bank of India (RBI), banks are allowed to make provisions for early withdrawals, but they can implement penalties themselves.
• Move the amount to your linked savings account: In case you want to know about transferring money from fixed deposit to savings account, the banks usually do this by transferring the money to your savings or current account.
• Transfer the money to another bank account: As soon as the money gets into your savings account, then it can be transferred using NEFT, RTGS, IMPS, UPI, or cheque to any other bank.
• Create a new FD if needed: As soon as the money enters the other bank, it will be possible to deposit the amount into a new FD. This is the basic way of transferring money from FDs from one account to another.

If your question revolves around “can i transfer fixed deposit from one branch to another,” it would be easier since it depends on the procedure of the concerned bank. This case differs from transferring your FD from one bank to another. In branch transfer, you do not change ownership and account status.

In most cases, a fixed deposit transfer involves closing or managing the FD through any allowable procedure at the concerned bank, rather than moving the FD as it is from one bank to another.

Rules & Conditions for FD Transfer in India

FDs are subject to RBI directives and internal regulations of individual banks that restrict their alteration or transferability.

Important points to note:

• No direct ownership transfer: FD is an agreement between the bank and depositor, and thus ownership cannot be transferred mid-way, hence, the confusion in can fixed deposit be transferred to another person.
• Premature withdrawal allowed: The depositor can withdraw his FD before maturity, subject to penalty or reduced interest.
• Joint holder rules: This depends on the operating instructions of the joint holders. In most cases, consent from all is necessary.
• Nomination ≠ ownership: While the nominee can access the money after the depositor dies, he is not the owner during the duration of the tenure.
• Branch vs bank movement: The FD can be transferred within the same bank, but transferring it to another bank will mean closing it.
• Penalty & interest adjustment: Interest will be recalculated based on the duration of the FD, and any penalties may decrease the interest earned.
• Special case: death of depositor: In such a scenario, the amount will be paid out to the nominee or heir, often without penalty.
• FDs are non-transferable: Retail fixed deposits cannot be traded and, in most cases, require closure and reopening.

In summary, while fixed deposits guarantee safety, their transferability is quite low.

Tax Implications of Transferring FD (Fixed Deposit)

Since a fixed deposit is not usually transferred directly, the tax impact mainly depends on how the FD is closed, gifted, reinvested, or claimed. Interest earned on FD is taxable as per the depositor’s income tax slab, and banks may deduct TDS under Section 194A when applicable.

• Premature FD closure: If the FD is closed before maturity, interest may be recalculated at the applicable rate for the actual holding period. Banks may also apply premature withdrawal penalties as per their policy.
• FD amount credited to savings account: If you are checking how to transfer money from fixed deposit to savings account, remember that the transfer itself is not taxed. However, the interest earned on the FD remains taxable.
• Reinvestment in another person’s name: If the FD is closed and the money is reinvested in another person’s name, tax treatment depends on whether it is a gift, family transfer, or normal fund transfer.
• Gift to relative: Gifts received from specified relatives are generally exempt from tax in the recipient’s hands, but the interest earned later may still be taxable depending on clubbing rules and the relationship involved.
• Gift to non-relative: If the gift value exceeds ₹50,000 in a financial year, it may become taxable in the recipient’s hands under “Income from Other Sources,” unless covered under an exemption.
• FD held jointly: Tax is usually linked to the person whose funds were used to create the FD. Merely adding a joint holder does not automatically shift tax liability.
• Nominee receiving FD after death: A nominee may receive the FD amount after the depositor’s death, but legal ownership and tax treatment can depend on succession rules and actual beneficiaries.
• TDS on FD interest (General): Banks deduct TDS at 10% on FD interest if it exceeds ₹40,000 in a financial year (for individuals below 60), provided PAN is submitted. If PAN is not provided, TDS may be deducted at 20%.
• TDS on FD interest (Senior Citizens): For senior citizens (60+), TDS is deducted at 10% only if interest exceeds ₹50,000 in a financial year. No TDS is deducted below this threshold.

The tax impact is not on the “transfer” itself, but on the interest earned, withdrawal timing, and how the money is reassigned or reinvested.

Advantages & Disadvantages of Transferring FD Online

While a direct transfer of an FD is not always possible, many steps involved, like closing an FD, moving funds, or reinvesting can be done online. This makes the process more convenient, but it also comes with a few trade-offs.

Advantages

• Convenience and speed: You can initiate closure, check maturity details, and move funds without visiting a branch.
• Quick fund movement: Once you understand how to transfer money from fixed deposit to savings account, the process is usually completed instantly or within a few hours.
• Better control and tracking: Online banking allows you to monitor your FD, interest earned, and transactions in real time.
• Easy reinvestment options: After withdrawal, you can directly reinvest using net banking if you know how to transfer money to fixed deposit in the same bank or another bank.
• Less paperwork: Most banks allow FD-related requests digitally, reducing the need for physical forms and documentation.

Disadvantages

• Premature withdrawal penalties: Online closure still attracts penalties and interest adjustments, which may reduce your returns.
• Limited flexibility in ownership change: Even with digital access, you cannot directly shift ownership, which leads back to questions around FD transfer, and may push users to explore credit options that depend on factors like credit score, especially for those seeking loan approval with low income.
• Dependence on digital access: Users unfamiliar with online banking may find the process confusing or risky.
• Transaction limits and delays: Large fund transfers between banks may be subject to limits or processing delays.
• Security concerns: Online transactions require careful handling to avoid fraud or unauthorized access.

This approach makes FD-related actions faster and simpler, but it’s still important to understand the rules before making any financial move.

Alternatives to FD Transfer

If transferring an FD is not feasible, investors can consider other investment options that may offer better returns, liquidity, or flexibility.

Here are the key alternatives:

• National Savings Certificate (NSC): Government-backed option with a fixed tenure and tax benefits under Section 80C. Interest is taxable.
• Lease Investment: Investing in property for rental income and potential appreciation. Requires high capital and involves maintenance and vacancy risks.
• Public Provident Fund (PPF): Long-term investment with tax benefits and tax-free returns, suitable for low-risk investors.
• Government Securities (G-Secs): Sovereign-backed instruments offering high safety and fixed returns if held till maturity.
• Corporate Bonds: Provide higher returns than FDs but come with credit risk depending on the issuer.
• Debt Funds: Invest in bonds and money market instruments, offering diversification and potential for better post-tax returns, though returns are not guaranteed.
• Corporate Fixed Deposits: Offered by companies and NBFCs, these may provide higher interest rates than bank FDs but carry higher risk depending on the issuer’s credit profile.
• Recurring Deposits (RDs): Suitable for disciplined savings, allowing you to invest a fixed amount monthly with assured returns over a fixed tenure.

In most cases, the smarter move is not to “transfer” the FD, but to choose a better financial alternative based on your goal; liquidity, returns, or flexibility. In situations where immediate funds are needed, some individuals also consider a personal loan, including small-ticket options like a 10,000 personal loan, especially when maintaining investments is a priority.

Conclusion

Fixed deposits are a safe investment option but come with limited flexibility.

If you’re wondering can fixed deposit be transferred to another person, the answer is generally no in a direct sense. Most cases involve indirect methods like withdrawal, reinvestment, or nomination. Similarly, how to transfer fixed deposit from one person to another usually means closing the FD and creating a new one.

Key takeaways:

• FD transfer is not direct, it’s process-driven
• Check penalties before premature withdrawal
• Choose the method based on your goal

Understanding these basics helps you avoid confusion and make better financial decisions.

FAQs

1. Is it possible to change the ownership of an existing FD? No, ownership of an existing FD cannot be changed directly. To shift ownership, the FD usually needs to be closed and the funds reinvested in another person’s name.
2. Can an FD be transferred to a family member? Not directly. You can either add them as a joint holder, nominate them, or close the FD and create a new one in their name.
3. What happens to a Fixed Deposit after the account holder’s death? The FD amount is paid to the nominee or legal heir. The process depends on nomination details and bank rules, ensuring smooth settlement of funds.
4. Can a nominee claim and transfer the FD to their name? A nominee can claim the FD amount but cannot automatically become the owner. The funds are received and can then be reinvested in their own name.
5. Is it possible to add another person to an existing FD? In some cases, banks may allow adding a joint holder, but it depends on their policy. Otherwise, the FD may need to be closed and reopened jointly.
6. Can a single FD be converted into a joint FD? Usually not directly. Most banks require closing the existing FD and opening a new one with joint holders to reflect shared ownership.
7. Do banks allow name change in Fixed Deposit accounts? Banks generally do not allow name changes in FDs, except for corrections or legal updates like marriage. Ownership changes require closure and reinvestment.
8. What is the process to transfer an FD to another person? The usual process involves closing the FD, transferring the funds to a savings account, and opening a new FD in the other person’s name.
9. Are there any charges for transferring or closing an FD? Closing an FD before maturity may attract penalties and reduced interest rates. There are usually no separate transfer charges since direct transfer isn’t allowed.
10. Can an FD be gifted to someone else? Yes, indirectly. You can withdraw the FD amount and gift it. In some cases, assignment is possible, but it depends on the bank and FD type.
11. Is premature withdrawal required for transferring an FD? Yes, in most cases. Since direct transfer is not allowed, the FD must be closed before the funds can be moved or reassigned.
12. Can a minor be made the owner of a transferred FD? Yes, an FD can be opened in a minor’s name with a guardian. Direct transfer isn’t possible, but funds can be reinvested accordingly.
13. What documents are required to transfer an FD after death? Banks may require a death certificate, nominee details, identity proof, and claim forms. Legal heir documents may be needed if no nominee is registered.
14. Can an FD be transferred between different banks? No, an FD cannot be directly moved between banks. It must be closed, and the funds transferred to another bank to create a new FD.
15. Is it possible to transfer an FD online? You can close and reinvest an FD online, but direct transfer is not supported. Online banking helps manage the process more conveniently.
16. Can an FD be transferred without breaking it? No, most FDs cannot be transferred without closure. Alternatives like nomination or joint holding can help share benefits without breaking the deposit.
17. What are the tax implications of transferring an FD? The transfer itself is not taxed, but interest earned is taxable. Premature withdrawal and gifting may also have tax implications depending on the situation.