Key Takeaways:
You can withdraw your FD amount after maturity through internet banking or by visiting the branch.
Banks may auto-renew or auto-credit your maturity amount if no instructions are provided.
Understanding how your maturity amount is calculated and the tax implications can help you make better financial decisions.
Once your FD reaches maturity, you can either withdraw the maturity amount or allow the bank to renew it, depending on your instructions. In this guide, we will explain the withdrawal process, what happens after maturity, and what you should consider before using your maturity amount.
How to Withdraw Your Fixed Deposit After Maturity: Online & Offline Methods
Once your FD matures, you can withdraw the principal amount along with earned interest either online or offline, depending on your bank’s process.
Method One: How to Withdraw a Fixed Deposit Online
Online banking allows you to access your maturity amount without visiting the bank branch.
Step 1: Log in to your internet banking account
Sign in using your banking credentials and open the section related to fixed deposits.
Step 2: Find the FD withdrawal option
Look for options such as "Withdraw FD", "Close FD", or similar instructions.
Step 3: Select your fixed deposit
Choose the FD from which you want to withdraw money and review the details carefully.
Step 4: Verify the details
Check the amount, tenure, and linked bank account before proceeding.
Step 5: Confirm your request
Submit your withdrawal request. In many cases, the maturity amount gets credited to your linked savings account within one to two working days.
Method Two: How to Withdraw a Fixed Deposit Offline
If you prefer visiting the bank branch, you can withdraw your FD amount through a simple process.
Step 1: Visit your bank branch
Go to the branch where your fixed deposit account is held.
Step 2: Submit your FD certificate
Provide your FD receipt or deposit certificate as proof.
Step 3: Complete the withdrawal form
Fill in the FD maturity or withdrawal form and sign it.
Step 4: Verification & transfer
After verification, the bank transfers the principal amount and earned interest to your linked account.
What Happens to Your FD After Maturity?
If you do not provide instructions before your FD matures, banks may process the deposit automatically.
1. Automatic Renewal
Some banks may automatically renew the FD for the same tenure. However, the renewed FD may earn interest based on the prevailing rate rather than your original rate.
2. Automatic Credit to Your Account
Some banks may close the FD and transfer the principal and earned interest directly to your linked savings account. If applicable, TDS may be deducted from the interest amount.
How to Calculate Your FD Maturity Amount
Your maturity value depends on your investment amount, interest rate, tenure, and whether simple or compound interest applies.
1. Simple Interest Example
Suppose you invest ₹1 lakh for 3 years at 7% annual interest.
Simple Interest Formula:
SI = (Principal × Rate × Time) / 100
Calculation:
SI = (1,00,000 × 7 × 3) ÷ 100
SI = ₹21,000
Total maturity amount:
₹1,00,000 + ₹21,000 = ₹1,21,000
2. Compound Interest Example
Suppose you invest ₹1 lakh for 3 years at 7% annual interest, compounded yearly.
Compound Interest Formula:
A = P (1+r/n)ⁿᵗ
Where:
P = ₹1,00,000 (Principal amount)
r = 7% or 0.07
n = 1 (compounded yearly)
t = 3 years
Calculation:
A = 1,00,000 × (1 + 0.07/1)¹ˣ³
A = 1,00,000 × (1.07)³
A = 1,00,000 × 1.225043
A = ₹1,22,504 (approx.)
Interest earned:
₹1,22,504 − ₹1,00,000 = ₹22,504
Total maturity amount:
₹1,22,504
Because the earned interest gets added back to the deposit and continues earning interest, compound returns are generally higher over time.
Things to Consider Before Using Your Maturity Amount
Before making a decision after your FD matures, consider your financial goals carefully.
Reinvest the Amount: If you do not immediately need the funds, reinvesting them may help continue growing your savings.
Withdraw if Needed: You may withdraw the amount if you have upcoming expenses or financial goals.
Review Tax Implications: Interest earned on FDs may be taxable depending on your income slab.
Explore Other Options: You may also compare other investment choices depending on your risk appetite and goals.
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.
Manage Your Fixed Deposit Maturity Amount Smarter
Understanding FD withdrawal options, auto-renewal rules, and maturity calculations can help you make better decisions for your savings and future financial goals.
FAQs
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.
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.
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.
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.
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.
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.
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.
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.
Naina Rajgopalan
Naina Rajgopalan has a thing for numbers and a deep fascination to learn about all things finance. She's been money-wise from a young age and has always shared her knowledge and tips with those around her. Being a part of the content team at Freo, a neobank that offers flexible and customised financial products, along with benefits such as insurance on balance, safe & secure banking, and so on, Naina stays updated with the latest of what happens in the banking and fintech industries. She has taken upon herself to share her knowledge with readers across all walks of life to help them manage their finances and budgets better, so they can make better decisions while spending, borrowing, investing and saving.
