FD Auto Renewal

The decision to auto renew the FD should be according to the urgent requirement of money. The bank will auto renew your FD only when you give standing instructions to the bank.  You can select auto renewal of FD at any point of time throughout the entire FD tenure.

When the fixed deposit matures, the bank will immediately auto renew the FD for the same tenure as before at the current rate of interest. 

How to Renew Fixed Deposit?

Based on the financial institution, there are two ways through which you can renew your fixed deposit by choosing auto renewal option or by selecting the manual renewal. Let us have a look at both of these.

Automatic FD Renewal

Investors who have FD accounts in banks are given an option to renew their FD while opening their FD accounts. If you are opening your FD account online, you have to click on the auto renewal option before submitting the online FD application.

Alternatively, you can also open your FD account offline and here you need to tick the check box written ‘auto renewal’ on the offline FD application form before submitting it to the bank. 

Manual FD Renewal

If you missed to choose the auto renewal option while opening your FD account, you can still renew your FD. All you have to do this contact your financial institution where you have your FD and place a request to auto renew your FD. 

FD Auto Renewal Benefits

There are various advantages which you can enjoy by auto renewing your fixed deposit. Given below are its advantages: 

1. You don’t have  to go through any paperwork or documentation for the renewal of your fixed deposit. 

1. If you opt for auto renewing your FD, the bank will provide you with an additional rate of interest along with the base rate of interest. 
2. You will be able to save your time and effort by choosing FD auto renewal. 
3. You can continue to receive interest on your deposit without any interruptions if you renew your FD on time. 

Important Points to Remember When Renewing Your FD

Apart from the benefits which you are going to enjoy after your FD auto renewal, you also need to take a few factors into account while opting for this option. Let us have a look at it: 

Investment Goals 

As your age increases, you investment goals keep on changing. Thus, it is very important to take your investment goals into account while choosing FD renewal. For instance, if your goal is to get high returns from your investment irrespective of the risk, then renewing your FD is not the ideal option for you. However, if you are at your retirement stage, then it is advisable to renew your FD because FD provides stable returns with low to zero risks. 

Current Interest Rates 

One of the most important factors which you need to consider while renewing your FD is the current interest rate trend. It could be wise to hold off on renewing your FD if the interest rate is higher than it was when you first opened the account. On the other hand, it is advised to renew your FD if interest rates are on the downward trend.    

Expenses and Fund Requirements 

Another important factor which you need to take into account before choosing the FD renewal option is your urgent monetary requirements. If you see that you have to spend a huge amount because of any emergency, we would advise you to refrain from renewing your FD. On the other hand, if there are no major expenses in the future, you can renew your FD account. 

Essential FD Renewal and Withdrawal Terms

Given below are the essential FD renewal and withdrawal terms: 

What Happens If FD is Not Renewed or Claimed?

If the depositor does not provide the maturity instruction for auto-renewal, the bank will not renew the FD account. The bank often notifies the depositor when the maturity date comes near. 

If the investors does not select auto renewal or does not withdraws the funds, the bank will credit the maturity amount to the savings account of the depositors. The bank will credit the bank funds via National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS). In case the investors fail to do electronic fund transfer, the bank will issue a cheque in the name of the investors.