Fixed deposits are a trusted and reliable financial instrument that allows individuals to securely invest their funds with a predetermined interest rate and lock-in period. They are renowned for their stability and serve as a valuable addition to any investment portfolio.
One of the key advantages of fixed deposits is their ability to provide consistent returns regardless of market fluctuations. Whether you opt for a regular fixed deposit or a tax-saving fixed deposit, you can enjoy this benefit and have peace of mind knowing that your investment is safeguarded.
It is essential to be aware that upon maturity, you have the option to either withdraw the funds from your fixed deposit account or renew it for another term. The process of withdrawing money from a fixed deposit after maturity is straightforward and can be done conveniently through online or offline channels.
In this blog, we will delve deeper into fixed deposit withdrawal after maturity. We will also explore alternative options that can be explored to maximize the benefits of your matured fixed deposit. So, let's embark on this informative journey to gain a comprehensive understanding of managing your fixed deposits effectively.
How to Withdraw Money from a Fixed Deposit After Maturity?
To withdraw the amount from a fixed deposit after maturity, there are convenient options available to investors. Firstly, visiting the bank's branch office allows for a traditional withdrawal process. This can be done by completing the necessary form and submitting the required documents.
Alternatively, a more streamlined approach is to utilize online banking services for fixed deposit withdrawals.
Withdraw Money From a Fixed Deposit Online
- Step 1: Log in to your online banking portal using your login credentials. Once you're logged in, navigate to the section or tab specifically dedicated to fixed deposits.
- Step 2: Within the fixed deposit section, locate the option that allows you to withdraw your fixed deposit. It might be labeled as 'withdraw FD' or something similar. Click on that option.
- Step 3: After clicking on the withdrawal option, you will be presented with a list of your fixed deposits. Select the specific fixed deposit from which you want to withdraw money. Make sure to double-check the details to ensure accuracy.
- Step 4: Once you have selected the desired fixed deposit, follow the provided instructions to proceed with the withdrawal process. The instructions may include confirming the amount you wish to withdraw or specifying the destination account for the funds.
By following these steps, you can easily withdraw the funds from your fixed deposit after it has reached its maturity. In case you fail to give any instructions to your issuer on what needs to be done after your FD matures, the issuer will then take action on your behalf in one of the below mentioned ways.
What Happens to FD After Maturity?
-
Auto-Renewal
In auto-renewals, when it comes to fixed deposits, the bank will automatically renew the deposit for a duration of one year or for the same period as the original fixed deposit (FD) with identical terms and conditions. This means that unless specified otherwise, the FD will continue for another year or for the same tenor as the initial deposit, maintaining the same terms and conditions as agreed upon initially. Auto-renewals provide convenience and continuity for depositors, ensuring that their funds remain invested and continue to earn interest without the need for manual intervention or renewal procedures.
-
Auto Liquidation
Upon the due date, the fixed deposit will be liquidated, and the bank will proceed to transfer the total amount, which includes the principal sum along with the accumulated interest, to your savings account.
Although this process is generally standard, it is essential to familiarize yourself with the specific procedure for withdrawing funds from the fixed deposit after it reaches maturity. It is possible that there might be special provisions or terms outlined by the issuer that you should be aware of. These provisions could be mentioned on the deposit certificate or any other relevant documents provided to you. By reviewing and understanding these details, you can ensure a smooth and hassle-free withdrawal process, adhering to any specific instructions or conditions specified by the issuer.
Final Thoughts
It is essential to understand how to withdraw your money from a fixed deposit. It is important to plan ahead and decide whether to reinvest the amount or withdraw it. You should also be aware of the possible tax implications and any penalties that may apply in case of early withdrawal. By knowing what to expect, you can make informed decisions about your finances and achieve your financial goals. So, take some time to evaluate your options and choose the best course of action for your FD. Remember, proper planning today will lead to a better tomorrow!
Related post - Premature Withdrawal Of Fixed Deposits.
FAQs
1. What is maturity instruction?
When you buy a fixed deposit (FD), both banks and NBFCs will require you to provide something known as a maturity instruction. This instruction allows you to specify whether you want the term deposit to be automatically renewed.
2. Can a FD be renewed online?
Absolutely! If you’ve opened the deposit account online, you can conveniently renew it using net banking or mobile banking as well.
3. Do all banks charge a fee/fine/penalty for premature withdrawal?
Fees differ among banks and NCFCs. Some may charge a fee, while others may not.
4. Can I withdraw a tax saver deposit before the completion of the tenure?
Tax saver FDs have a mandatory lock-in period of 5 years, during which no withdrawals are permitted under any circumstances.
5. How to 'break' an FD?
If you encounter a financial emergency, you have the option to prematurely close your term deposit and have the funds promptly transferred to your bank account.
6. Can I withdraw interest from my FD account?
Absolutely! With a non-cumulative fixed deposit, you have the flexibility to receive interest payments on a monthly, quarterly, half-yearly, or annual basis.
7. How do I stop my fixed deposit from automatically renewing?
To prevent the automatic renewal of your FD, make sure to notify the bank prior to its maturity date.
8. How is the penalty calculated on premature withdrawal of fixed deposits?
If you choose to withdraw your fixed deposit before its maturity date, you’ll incur interest as a penalty.
