• Renewals and Withdrawals of Fixed Deposits

    Fixed Deposits (FD), are a popular investment choice among Indians and is always subject to renewal and withdrawal. This applies to  all types of term deposits including those in banks and those in Non-Banking Financial Companies (NBFC). Let’s say you open an FD account for Rs.3 lakh for 10 years at the rate of 10%. After the completion of 10 years, the term deposit will have to be renewed if you want to continue to hold to it. Otherwise, it has to be withdrawn. In case you forget to renew it, it will be auto renewed for the same tenure if you have given maturity instructions. Renewal happens at the present interest rate that is offered on the term deposit.

    It is very important to keep track of your term deposits, because if you completely forget to renew it, the maturity amount will be difficult to claim later or it may be paid to the nominee. Auto-renewal may prove disadvantageous if the bank has reduced its interest rates. On the other hand, premature withdrawal may be subject to penalty charges.

    Some important terms on renewal and withdrawal of FDs
    Withdrawal A term deposit holder can withdraw the principal invested along with the interest earned when the FD reaches maturity
    Renewal An FD holder can renew a deposit when it reaches maturity for the same tenure  if she/she wants to do so.
    Auto-withdrawal Auto-withdrawal happens when the bank or NBFC automatically credits the maturity amount (principal + interest) to the customer’s savings bank account upon completion of the deposit tenure.
    Auto-renewal If an FD holder has given instructions to the bank, the deposit will be automatically renewed for the same duration at the current rate of interest.
    Premature withdrawal When a deposit is broken before the maturity period it is referred to as premature withdrawal. Some banks may charge a penalty for this.

    Renewal of FDs

    • On maturity, an FD can be directed toward renewal or withdrawal.
    • The renewal clause is available as an auto-renewal feature, wherein the bank or financial institution will automatically renew your deposit for the same period of time and at the same interest rate on maturity.
    • This is a good option if you have invested funds without any foreseen need for them.

    Withdrawal of FDs

    • The auto-termination option shuts down the FD on maturity and transfers the funds to a preselected savings account.
    • Once again, the auto-termination option might result in lower interest rates on your reinvestment owing to market changes during the tenure of the original FD.
    • It is important to take an informed decision while renewing your FD so as to get the highest benefits.
    • Withdrawal can be done even before the FD matures, however, this may attract some penalty charges

    How to close an FD prematurely online: Step-by-step process

    Step 1: Log on to your bank website using all login credentials. Please note that you need to have an active internet banking account to close an FD online

    Step 2: Once logged in, go to the home page and click on ‘Close FD account prematurely’

    Step 3: A list of all the FDs that you have will be displayed, click on the one you wish to close

    Step 4: Verify details and provide password credentials to authenticate the transaction. The funds will be credited to the account that is linked to the term deposit

    What happens when you forget to renew an FD?

    ‘Buy and Forget’ mentality, you might sometimes lose out on better deals which you could have found even on a cursory look at available options.

    Let’s say you invested Rs.5 lacs in a 5 year FD with interest rate of 0%. At the end of 5 years, the fixed deposit rates have fallen to 8%, a significant decrease over the said period. In case you had opted for auto-renewal, you would have been automatically enrolled in the same FD for another 5 years and at the same rate of 10% regardless of market rates. If you had opted for withdrawal, a new FD will offer you 8% rate of interest on the deposit.

    Suppose you have bought an FD of Rs.5 lacs for a tenure of 5 years and forgot about the maturity date. At the 6th year when you do realize that you had invested in an FD, you go back to the bank and ask for withdrawal of funds. The bank obliges, but you end up losing interest for the excess 1 year of deposit because it will be considered preclosure of the account. If you had opted for auto-withdrawal, you would have received the amount in a bank account and taken decisions to grow it or let it idly earn savings interest.

    FAQs on FD withdrawal and renewal

    1. What is maturity instruction?

    When you are purchasing an FD, all banks and NBFCs ask for what is known as a maturity instruction. Instructions can be given for auto-renewal of the term deposit.

    2. Can an FD be renewed online?

    Yes. If the deposit account has been opened online, it can also be renewed online through net banking or mobile banking.

    3. Do all banks charge a fee/fine/penalty for premature withdrawal?

    This varies from bank to bank. While some banks or NCFCs may levy a certain fee, others may not.

    4. Can I withdraw a tax saver deposit before the completion of the said tenure?

    No. All Tax saver FDs come with a lock-in period of 5 years, before which no withdrawal can be made at any cost.

    5. How to ‘break’ an FD?

    In case of any kind of financial emergency, you can close the term deposit before the agreed duration and get the funds credited to your bank account.

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    Customer Reviews

    • SBI Fixed Deposit
      "Good in FD service"
      0.5 5.0/5 "Blown Away!"
      I am having a savings account with State Bank of India hence i have selected the Fixed deposit investment scheme with them. They are providing the interest rate of 8%. I have invested the money 2 years back and there is a lockin period of 72 months.
      Was this review helpful? 47
      , visakhapatnam
      Reviewed on Mar 02, 2020
    • Kotak
      Kotak Fixed Deposit
      "Safe and secure"
      0.5 4.0/5 "Great!"
      Kotak Mahindra bank is a reliable bank and good management thats the reason i have invested the fixed deposit scheme in this bank. They have provided me a interest rate of 7% and i have kept for the period of 1 year and 1 month. Overall, I'm satisfied with their services.
      Was this review helpful? 11
      , ahmedabad
      Reviewed on Mar 01, 2020
    • HDFC Bank Fixed Deposit
      "Safe and Secure"
      0.5 5.0/5 "Blown Away!"
      I have purchased HDFC Fixed deposit which I am renewing for every 13 months. They have given me an interest rate of 7% and There is no processing fee and there is no locking period as well. If I'm withdrawing FD amount before locking period, they are charging some amount.
      Was this review helpful? 23
      , ahmedabad
      Reviewed on Mar 01, 2020
    • Punjab National Bank Fixed Deposit
      "PNB Fixed Scheme is good"
      0.5 5.0/5 "Blown Away!"
      I went to the nearby branch for the Punjab National Bank for taking my fixed deposit as per my family members recommendation. I have invested the money of Rs. 50000 there was a lockin duration of 6 years when i withdraw the money, i got the money of Rs.1 lakhs. They have offered me a interest rate of 7%.
      Was this review helpful? 18
      , jamshedpur
      Reviewed on Feb 27, 2020
    • Post Office Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I was having my savings account from Post office hence i have invested my money into Post office Fixed deposit scheme. I have invested the money of Rs. 25000. There is a lockin period of 10 years. I have invested the money in the year of 2011. Post office service is proper. Overall, I'm happy about the services.
      Was this review helpful? 56
      , chennai
      Reviewed on Feb 25, 2020
    • HDFC Bank Fixed Deposit
      "FD is not good with HDFC"
      0.5 4.0/5 "Great!"
      I have invested some money as a Fixed deposit in HDFC Bank and the interest rate is not that much great because they are giving interest as compared to others. I have invested the money of Rs. 3L and there is a locking period of 5 years. Its 7% interest rate. If they are increasing the interest rate, it would be fine. Since I do all my transactions with this bank, I have selected same for my FD as well.
      Was this review helpful? 16
      , bangalore
      Reviewed on Jan 31, 2020
    • SBI Fixed Deposit
      "Good support"
      0.5 5.0/5 "Blown Away!"
      I have chosen my fixed deposit scheme from State bank of India because I'm maintaining my salary account with them and they provided rate of interest is fine for me. I have invested the money of Rs. 2.75 lakhs. There is a locking period of 45 days. They are giving interest rate of 4.5%. Overall, I'm satisfied with their services.
      Was this review helpful? 27
      , namakkal
      Reviewed on Jan 18, 2020
    • Kotak Fixed Deposit
      "Good App"
      0.5 5.0/5 "Blown Away!"
      I have been investing the money of Rs. 3 lakhs for the fixed deposit. I have selected Kotak mahindra bank for the FD because their net banking facility is very different when i compared to other. I can access everything regarding the account hence its easy to handle the transactions. I'm not sure about the interest rates. 7 months before, i have invested the money.
      Was this review helpful? 13
      , bangalore
      Reviewed on Jan 08, 2020
    • Kotak Fixed Deposit
      "Excellent Services"
      0.5 5.0/5 "Blown Away!"
      Its because of the competitive interest rates, i have selected the Fixed deposit in Kotak Mahindra bank. I have invested the fixed deposit 1.5 years ago and there is a lockin period of 5 years. They have invested the amount of Rs. 7.5 % and the employees are helpful in the branch.
      Was this review helpful? 10
      , mumbai
      Reviewed on Jan 08, 2020
    • Axis Bank Fixed Deposit
      "Good Savings scheme"
      0.5 4.0/5 "Great!"
      I have a Fixed deposit in Axis bank. I have invested the money of Rs. 10000 for two FDs. There is a lockin duration of 1 year. They are giving a interest rate of 7%. Through net banking, i have activated this Fixed deposit. There is no tax benefits available. Axis bank service has been good. Overall, I'm happy about their services.
      Was this review helpful? 12
      , kolkata
      Reviewed on Dec 31, 2019
    • Oriental Bank of Commerce Fixed Deposit
      "Good Scheme"
      0.5 5.0/5 "Blown Away!"
      Since last 15 years, i have a account with Oriental bank of commerce thats the reason i have invested the money in fixed deposit with the same bank. I have invested the amount of Rs. 11 lakhs. They are giving the interest rate of 6.5%. There is no locking period but i have chosen the duration of 1.5 years. There is no additional charges deducted for this fixed deposit.
      Was this review helpful? 17
      , bulandshahr
      Reviewed on Dec 03, 2019
    • Post Office Fixed Deposit
      "Good Service"
      0.5 4.0/5 "Great!"
      Interest rate is very low in Indian post office Fixed deposit scheme because they are providing only 8.5%. I have chosen this office because of the child benefits. I have invested the money of Rs. 1.5 years. Its 3 years lock in period. Overall, I'm satisfied with the service provided by post office employees.
      Was this review helpful? 67
      , parvathipuram
      Reviewed on Dec 03, 2019
    • SBI Fixed Deposit
      "Good bank for Fixed Deposit"
      0.5 4.0/5 "Great!"
      I have invested the money in SBI for a fixed deposit and based on my wife recommendation i have chosen it. They are providing the interest rate of 7.25%. They have option to select the lock in period in that i have chosen 5 years. We had visited their branch and the response was good.
      Was this review helpful? 38
      , mumbai
      Reviewed on Nov 12, 2019
    • HDFC Bank Fixed Deposit
      "Good one"
      0.5 4.0/5 "Great!"
      Its easy accessible and to redeem so that i have invested the money in Fixed Deposit with HDFC BANK. I have invested the money of Rs. 2.5 lakhs and they have provided me a interest rate of 7.5%. There is no locking period. I didn't got any additional charges till now.
      Was this review helpful? 23
      , hyderabad
      Reviewed on Nov 12, 2019
    • Post Office Fixed Deposit
      "Safety deposit"
      0.5 5.0/5 "Blown Away!"
      I have paid the money of Rs. 4.5 lakhs as a fixed deposit in the Indian post office. For the safety purpose, i have chosen the post office account. They are offering me a interest rate of 7.9%. There is a lockin period of 5 years. If i withdraw the money in 1 year, they will reduce the interest rate of 2% and after 3 years, its 1%.
      Was this review helpful? 120
      , jaipur
      Reviewed on Nov 08, 2019
    • Central Bank of India Fixed Deposit
      "Good Bank"
      0.5 4.0/5 "Great!"
      Interest rates are less in Central Bank of India so I had taken a fixed deposit. I have invested the money of Rs. 1 lakh in my wife's name. Branch is near from my place so I have chosen this bank. Yearly once, I get the money of Rs. 6,765 for the interest. There is a locking period of 1 year.
      Was this review helpful? 16
      , tirupur
      Reviewed on Nov 06, 2019
    • ICICI Bank Fixed Deposit
      "Customer centrice & User friendly app"
      0.5 4.0/5 "Great!"
      I am doing Fixed Deposit with ICICI BANK and its been around 5years. They haven't been paying good interest and its more or less same like other banks as I used to hold my salary account with ICICI, I have decided to be with one bank. There is no locking period and its flexible. They do give good support and the app is user friendly. Even deposit account can be opened through i-mobile or net banking itself.
      Was this review helpful? 20
      , nasik
      Reviewed on Oct 15, 2019
    • SBI Fixed Deposit
      "Good"
      0.5 3.0/5 "Satisfactory"
      I had a Fixed Deposit in State Bank of India, I have completed the tenure before 3months ago. I have no issues with the customer service. They are given me 7% interest rate for 2years. There is no profit and processing fee. I got an online access, where I can check the interest rate anytime on the YONO app or else SBI online.
      Was this review helpful? 31
      , tirupati
      Reviewed on Oct 15, 2019
    • SBI Fixed Deposit
      "Interest charges are good. "
      0.5 3.0/5 "Satisfactory"
      I have invested some money through FD. My salary account is in SBI so i have a zero ATM charges and the limit is not actually set by SBI. They do have short term FDs which is pretty good. I have invested the money of Rs. 60000 and the interest rate is 10.01% for the tenure period of 16 months. There is no lockin period. There is no hassle to getting the money back.
      Was this review helpful? 45
      , kolkata
      Reviewed on Oct 01, 2019
    • Dena Bank Fixed Deposit
      "Good plan for senior citizen"
      0.5 2.0/5 "Expected more"
      I have invested the money in Dena bank through Fixed deposit and the growth is not that much good. They are not taking any hidden charges. Only because of the Government undertaken bank, i have selected them. They are providing a interest rate of 6% per annum. I have invested the money of Rs. 2 lakhs. There is a lockin period of 1 year.
      Was this review helpful? 18
      , new delhi
      Reviewed on Sep 24, 2019
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