What Happens If You Do Not Renew Or Withdraw Your Fixed Deposit At Maturity

512 min


Fixed deposits are an excellent way of investing your savings and increasing it over the period. If you do not want to deal with the market risks, this is one of the safest investment options. FD rates in India are quite decent and will give you a good return at the end of the period. With promised returns, you do not have to monitor it regularly. All you have to remember is that the maturity date of your account. But what happens if you don’t claim your FD or withdraw the money?

How Banks Deal With Unclaimed FD Accounts?

Bank procedures vary when dealing with unclaimed FD account. The steps will correspond with their predetermined rules and regulations. However, generally, banks follow a similar procedure when the fixed deposit account remains unclaimed. The banks tend to renew the FD for an unlimited period after a couple of consecutive tenors.

Moreover, the bank will also contact you to provide instructions on how to move ahead with your investments. But if they fail to contact you, the FD account will continue to get auto-renewed at the present rate of interest.  

Some banks send a demand draft to the mentioned address on the FD form. According to the guidelines of the Reserve Bank Of India, if the bank is able to track the account holder and get his or her consent for renewable, then the deposit can be reduced from the date of maturity. 


What Option Do You Have?

When choosing a fixed deposit, make sure to assess FD rates in India and select a reliable bank to secure your money in the future.  When taking an FD account, you can have two renewal options. In the first case, you can choose to automatically transfer the money to your savings bank account after the maturity date.

For this, you have to mention the account number and bank details where you want to transfer. Another option you have is to renew the FD upon its maturity. You can renew the FD for as long as ten years. When there is no mention of either of these options, the bank considers it an unclaimed FD.

Why Should You Consider Renewing the FD?

The longer your FD stays in the bank, the higher your return will be. So if you do not have any foreseeable big expense coming up, you can consider renewing your FD. When renewing your FD, consider whether you are betting a better rate of interest.

If your existing bank is not providing you with a better interest rate, then you can withdraw the sum upon maturity and choose another bank’s FD with a better interest rate. You can easily assess the rate of interest of FD plans by banks online. 

Final Thoughts 

It is always safer to be clear about what you will do with the FD upon its maturity when taking one. And make sure that you select a reliable brand to get your FD that takes the right measures to inform customers about their fixed deposit being matured.


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