Mudaraba Term Deposit

Mudaraba Term Deposit Receipt (MTDR) is a profit bearing account intended for those customers who can deposit money for fixed period of time. These deposits are repayable subject to a period of notice and hence known as time deposits or time liabilities meaning thereby that these are withdrawable subject to a period of notice and not on demand.

The Bank has defined it's MTDR products in various time slabs, which are as follows:

• Mudaraba Term Deposit – 1 month

• Mudaraba Term Deposit – 3 months

• Mudaraba Term Deposit – 6 months

• Mudaraba Term Deposit – 12 months

• Mudaraba Term Deposit – 24 months

• Mudaraba Term Deposit – 36 months

Profit rate varies according to the above defined time slabs. No profit on MTDR is paid against the deposit for less than 1 (One) month. In other cases of pre-mature encashment the time duration of the deposit is divided in nearest slab. Like, if a client makes a MTDR for 24 months and tries to encash in 18 months time then his/her MTDR is treated for profit calculation as follows:

• For 12 months time 12 months MTDR profit rate is applied

• For next six months 6 months MTDR profit rate is applied

If any odd amount of time remains then Mudaraba Savings rate is applied. 

Like any Mudaraba deposit, profit provisioning on MTDR is made with the provisional profit rate. After year end it is adjusted with the actual rate.

Some Important features of Mudaraba Term Deposit

01.

This is a profit and loss bearing product.

02.

Profit is calculated on daily basis and credited on term end using the provisional rate of profit.

03.

After year end the accounts are adjusted with actual rate of profit. If the actual profit rate is greater than that of provisional then the extra profit is credited to the accounts or to sundry account if any account has closed during the year. In case where the actual rate is lower than the provisional rate the loss amount is debited from the client’s account or notice can be send to the client to rebate the loss amount if the account is closed during the year.

04.

After profit is being credited to accounts income tax is deducted / debited from the accounts. The rate of income tax is 10%.

05.

Depending on the amount of deposit there is a yearly excise duty to be charged on this type of account.

06.

There is also a specific amount of service charge, chargeable on half-yearly basis.

07.

Loan can be taken against MTDR. The Bank may sanction about 80% of the MTDR amount.

08.

This is a non-cheque bearing product.