Corporate practice bd |
Fixed
Deposit Receipt (FDR):-
FDR Stands for Fixed Deposit Receipt, which may be a financial instrument issued by the Bank & offered to the investor a high-interest rate of return (ROI) over than the regular saving Account in Bangladesh.
What are the advantages of fixed deposits?
Under Fixed deposit schemes offer the sort of benefits to the depositor. Such as,
01. It is Flexible tenure
02. Offer guaranteed returns
03. Offered different interest pay options like-monthly, annually, half-yearly, Quarterly also
04. Premature withdrawal and nomination facilities
05. Individuals choose fixed deposits as they are not risky and also provide assured returns
Most common content of FDR(fixed deposit receipts are as follows-
01. Name of the applicant
02. Age of the applicant
03. Account Number of the applicant
04. Amount of principal that has been placed
05. Rate of Interest that's applicable
06. Date of Maturity
07.By fulfilling the maturity date the individual received an interest.
08. Auto-renewal and date of maturity - it's convenient for people to decide on auto-renewal.
Accounting Treatment:-
Let’s start with the Accounting treatment- where a group of companies already lunch FDR in the company name say, XYX A-100% Export oriented group of company in Bangladesh.
Say for Example
The company FDR Account NO.-200520092522, ABC Bank has debited our SND Account say-1282 in respect of FDR Account by TK.10, 00,000.00@ 5.50% quarterly. FDR creation date.01.01.2020.
(FDR creation)Amount deposit from our bank as a Bank guarantee
FDR Account NO.-200520092522(Debit) TK.10, 00,000.000
SND Account say-1282 TK.10,00,000.000
Description (FDR deposited to Bank from our SND Account say-1282, dated, 01.01.2020
Every yearly Transaction Record(until Maturity date)
Step-01.Quarterly
interest received by Bank@5.50% (January TO March-2020)
FDR Account NO.-200520092522(Debit) TK.13,750.000
(10, 00,000*5.50%/12*03) Interest received from FDR credit TK.13,750.000
Description (Interest received from FDR for 03 months @5.50% dated, 31.03.2020)
Step-02 .Advance income tax (AIT) charge by Bank
Advance Income tax Debit (13750*.15) TK.2,062.000
FDR Account NO.-200520092522(credit)TK.2,062.000
Description (AIT deduction at the time of interest payment by bank dated, 31.03.2020)
Step-03.Quarterly
interest received by Bank@5.50% (April TO June-2020)
FDR Account NO.-200520092522(Debit) TK.13,750.000
(10, 00,000*5.50%/12*03) Interest received from FDR credit TK.13,750.000
Description (Interest received from FDR for 03 months @5.50% dated, 30.06.2020)
Step-04 .Advance income tax (AIT) charge by Bank
Advance Income tax Debit (13750*.15) TK.2,062.000
FDR Account NO.-200520092522(credit)TK.2,062.000
Description (AIT deduction at the time of interest payment by bank dated, 30.06.2020).
Step-05.Quarterly
interest received by Bank@5.50% (July TO September-2020)
FDR Account NO.-200520092522(Debit) TK.13,750.000
(10,00,000*5.50%/12*03) Interest received from FDR credit TK.13,750.000
Description (Interest received from FDR for 03 months @5.50% dated, 30.09.2020)
Step-06 .Advance income tax (AIT) charge by Bank
Advance Income tax Debit (13750*.15) TK.2,062.000
FDR Account NO.-200520092522(credit) TK.2,062.000
Description (AIT deduction at the time of interest payment by bank dated, 30.09.2020)
Step-07.Quarterly
interest received by Bank@5.50% (October December-2020)
FDR Account NO.-200520092522(Debit) TK.13,750.000
(10,00,000*5.50%/12*03) Interest received from FDR credit TK.13,750.000
Description (Interest received from FDR for 03 months @5.50% dated, 31.12.2020)
Step-08 .Advance income tax (AIT) charge by Bank
Advance Income tax Debit (13750*.15) TK.2,062.000
FDR Account NO.-200520092522(credit) TK.2,062.000
Description (AIT deduction at the time of interest payment by bank dated, 31.12.2020)
Step-09.Yearly Excise duty charge by Bank(31.12.2020)
Bank charge(general)(IF) Debit tk.500.000
FDR Account NO.-200520092522(credit) tk.500.000
Description (Yearly Excise duty charge by Bank(31.12.2020)
Yearly Summary of FDR FDR Account NO.-200520092522
Original FDR Deposit Amount was TK.10,00,000.000
Add: FDR Interest(13750*4)TK.55,000.000
Less:Advance incomtax(AIT)(55,000.000*.15)TK.8250.000
Less:Excise duty(if)TK.500.000
Net FDR Balance as on (31.12.2020 ) TK.10,46,250.000
Note:Same Entry have to pass every year( Till the date of Maturity).
The End.........