We all are well versed with Fixed Deposits as they have been traditional investments prevailing since many years. The banking regulator RBI (Reserve Bank of India) has prescribed different limits for deposits and have bifurcated them into bulk and retail deposits. RBI has given discretion to banks to offer differential rate of interest on bulk and retail deposits.
Bulk Deposit – Bulk Deposits are otherwise known as Bulk Fixed Deposit / Bulk Term Deposit (BTD). Any single fixed deposit of rupees two crore and above (Rs. 2 Cr. & >) is known as Bulk Deposit. HNIs, NRIs, business entities/ corporates/ institutions mostly book bulk fixed deposits to earn interest on their surplus funds. Some banks show their bulk deposit rates in public, while others keep it secret and ask customers to contact their branches.
Retail Deposit – Retails Deposits are also popularly known as Retail Fixed Deposit / Retail Term Deposit (RTD). Any single fixed deposit of less than two crore (< Rs. 2 Cr.) falls under Retail Deposit. You can have multiple retail deposits aggregating to 2 crore or above but them all of them will still be retail deposits and will not be treated as bulk deposit. Most of the people book retail fixed deposit as their amount is small value and falls under this category. Banks publish and advertise their retail fixed deposit rates at their branches, website etc. for wide popularity. Disclosure of these rates to public are mandatory by the RBI.
Anyone can book both Bulk and Retail Fixed Deposit if they have the desired amount in any bank of their choice.
The present definition of bulk deposit which is Rs. 2 Crore and above, came into effect in February 2019 after banking regulator RBI brought in the new direction. Prior to Feb’19 direction, single deposit of Rs. 1 Crore and above were classified as bulk deposits.