Such loan linked deposit scheme has the following broad features:
(1) The minimum amount of initial deposit should be atleast ` 200. Subsequent deposits
must be in multiples of ` 50.
(2) Deposits with HDFC earns 7% compound interest payable half yearly. The interest is
receivable only at the time of the withdrawal of the deposit.
(3) The deposits are for a minimum period of 18 months and the maximum period of 60
(4) HDFC deposits are exempted from wealth tax upto ` 5,00,000 along with other
(5) Loans are offered by the HDFC for housing purpose. The interest is charged
depending on the amount of loan taken. The interest rates on HDFC loans are now
(6) The loan repayment period may extend upto 20 years.
HDFC deposits are not attractive due to low interest rate. However, deposits are collected
by HDFC on a large scale as housing loan facility is linked with the deposits. The
procedure for granting loans is also lengthy and time consuming. However, middle class
people take loans from HDFC for housing purpose. Recently, the interest rate on housing
loan is brought down by HDFC along with other housing loan lending agencies. In addition,
income tax benefit is also available in the case of such housing loans.
In addition, HDFC also accepts other deposits from individuals. Deposits placed with
HDFC are exempt from Wealth Tax. There is no tax deduction at source (TDS) on interest
paid/credited upto ` 5000 per branch in a Financial Year. Loan against deposit is available
after 3 months from the date of deposit upto 75% of the deposit amount, subject to the
other terms and conditions. Interest on such loans will be 2% above the deposit rate. This
facility is not available for Easy Way Savings and deposits from minors.
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