Bank holiday: Is your Fixed Deposit maturing on a bank holiday? Know how interest will be paid

Have you ever wondered how interest on fixed deposits maturing on a bank holiday or a non-business day is credited? With banks observing three consecutive holidays starting from April 29, 2025, this question might be on your mind more than usual. This article is here to provide the answers you need.

These master directions have explained how commercial banks like SBI, HDFC Bank, ICICI Bank, etc., should credit the interest of fixed deposits maturing on a holiday. The RBI has also set the rules for cooperative banks.

Fixed deposit in commercial banks

If a fixed deposit matures on a holiday or a non-business working day, then banks are required to pay interest for the bank holidays falling between the date of maturity and the succeeding working day.

"If a term deposit is maturing for payment on a non-business working day, banks shall pay interest at the originally contracted rate on the original principal deposit amount for the non-business working day, intervening between the date of the maturity of the specified term of the deposit and the date of payment of the proceeds of the deposit on the succeeding working day," says RBI.

The RBI further says that in case of reinvestment deposits and recurring deposits, banks shall pay interest for the intervening non-business working day on the maturity value.

Fixed deposit in cooperative banks

If the deposit matures on a Sunday/ holiday/ non-business working day, then the cooperative bank is required to pay interest for the holiday.

"If a term deposit is maturing for payment on a Sunday/ holiday/ non-business working day, co-operative banks shall pay interest at the originally contracted rate on the original principal deposit amount for the Sunday/ holiday/ non-business working day, intervening between the date of the maturity of the specified term of the deposit and the date of payment of the proceeds of the deposit on the succeeding working day," RBI says.

Further, in case of reinvestment deposits and recurring deposits, cooperative banks shall pay interest for the intervening non-business working day on the maturity value, it adds.