What Happens if You Do Not Renew or Withdraw your FD?

When investing, it is imperative that you know how your finances will benefit or suffer under all possible scenarios. So, take a look at what happens if you don’t renew or withdraw your fixed deposit at maturity.

Fixed deposits (FDs) are popular investment options amongst Indians, and for good reason too. They are safe, independent of market fluctuations, and offer guaranteed returns. You stand to enjoy several benefits with no threat to your investment corpus. But, what happens to your fixed deposit once it reaches maturity, and you don’t renew or withdraw it? Read on to find out.

If you Don’t Renew your Fixed Deposit

• While several financial institutions give you the option of selecting auto-renewal on maturity, not everyone chooses this. 
• In case you fall into this category, here’s how this will affect your fixed deposit. If you didn’t opt for auto-renewal but opted for the sum to be transferred to a savings account at the time of application, that’s exactly what will happen. 
• Once it is credited to the savings account, you can choose to either hold on to the money or reinvest it. You can create another fixed deposit, or choose another investment option altogether. 
• It is possible that you haven’t specified the account to which you’d like the amount to be transferred and haven’t selected auto-renewal as well. In such a case, your financial institution will send you a notification. 
• This is to inform you of the fact that your fixed deposit has matured and to ask you what you would like to do next. But, note that some banks skip this step and mail a demand draft of the amount to your registered address. 
• According to the guidelines set by Reserve Bank of India, you will be tracked by the financial institution within 14 days after your FD matures and you choose to renew it. The interest will be calculated from the date of maturity instead of the date of renewal. 
• If the financial institution delays in informing you and exceeds the 14-day window, they will be liable to pay for the delay. 

If you Don’t Withdraw your Fixed Deposit

• If you don’t withdraw the FD at maturity, the financial institution may automatically renew your FD for as many time as required. 
• But, if the FD isn’t withdrawn for more than two or three consecutive tenors, the institution will get in touch with the applicant. If the applicant is not responsive, the amount will be handed over to the applicant's nominee. 
• Not claiming your FD at maturity may seem convenient, as the financial institution will auto-renew it. But, do bear in mind that the interest accrued will be at a savings account interest rate. 
• If your deposit is unclaimed or overdue for a period of more than 10 years, the financial institution labels your fixed deposit as an inoperative account. Then, it transfers the sum to the bank’s Depositor Education and Awareness Fund Scheme. 

So, it is evident that ignoring your FD—or any other investment, for that matter—is far from advisable. To ensure that you make the most of your investments, it is wise to watch them closely. Some financial institutions even offer the facility to do this online. One such fixed-deposit service provider is Bajaj Finserv. Their FDs offer a high rate of interest, along with convenient online fund management.

Is Your Fixed Deposit Making You Wealthier?

Yogesh Shugani, the Jabalpur resident, has invested in a bank’s fixed deposit and was earning 6.95% FD interest rates. He had saved some money, and that’s why to make his money grow, he chose an FD over a bank’s recurring deposit while opting for investment.

However, once six months passed, he analyzed his investment and found that his bank was offering him lower fixed deposit interest rate profits when compared to his friend’s FD account with a private company which was fetching him around 8%.

Thus, he quickly realized his mistake and closed his bank’s FD account and initiated an FD with a non-banking finance company (NBFC) and is a happy man.

If you are the one like Yogesh who is not happy with his/her current fixed deposit scheme, you can open an FD account with a leading non-banking finance company (NBFC) and make the most of it.

Let’s provide you some amazing features of a company fixed deposit scheme that will not only let your investment earn more but even avail other benefits.

Avail a higher fixed deposit interest rate profits

When compared to banks, non-banking finance companies offer a healthy return on FD interest rate of up to 8%. Thus, the immediate benefit is that you get to make your investment grow faster facilitate your goals better. 



You also get the facility to apply for a cumulative as well as non-cumulative FD. Monthly, quarterly, half-yearly and yearly interest profits are given in a non-cumulative FD type while a non-cumulative type lets you earn more as the interest profits are calculated on a compounding basis.

You get an easy access

An online fixed deposit scheme with a leading non-banking finance company lets you have an online assessment of your account. It makes applying for an FD as well as managing and tracking of the fixed deposit accounts dead easy. 

Yes, once you have filled the online form, the lender calls you and schedule a meeting to pick the required documents and the cheque.

Tenor flexibility

Did not liked an FD account that you just opened? You can close it and open a new one instantly. Service providers offer investors with a flexible tenor facility. 

It means that you are free to select a tenor which suits you best. As a result, you get the freedom to apply for an FD account with a tenor ranging between 1 and 5 years. 

The higher the tenor, the higher the interest payout and that’s why you should choose a tenor accordingly if you want a fat FD income to follow.

Senior citizen fixed deposit

Financial institutions offer the highest fixed deposit interest rate to senior citizens. Yes, if you are a senior citizen, you can expect to gain the highest 8.10% FD interest rate gains. 

If you want to renew it or reinvest it after the maturity, you can expect a further 0.10% raise in your income.

FDs are insured

While other high-risk investments such as mutual funds do not offer assurance to the invested money, an FD account with an NBFC does. 

Yes, fixed deposits have insurance worth Rs.1 lakh on your sum of investment. Thus, it means that your invested money is in safe hands.

The Bottom Line

If you are looking to let your fixed deposits return you with a fabulous return, you can open an FD account with one of the leading non-banking finance company and get started. All the best!