Every early investor should invest in a fixed deposit for long-term benefits as it offers high and assured returns that allow you to build a sizeable corpus over time. A fixed deposit is also popular among investors because you can start and renew one with ease. Even though FDs do not require constant monitoring, keep track of the maturity date, so you can take the next steps with ease.
Read on to know what happens to your FD when you do not renew or withdraw it upon maturity.
Auto renewal of unclaimed bank fixed deposit
The procedure that a bank follows in the event of unclaimed fixed deposit varies from one institution to another depending on internal rules and regulations. A bank will either keep renewing the fixed deposit until it is claimed, or pay existing savings account interest rates on the maturity amount. In some cases, after two or three consecutive auto renewals, the bank will try to contact you and your nominee again and, in case of failure, it will continue to renew your investment.
Auto-termination of unclaimed fixed deposits
When you opt for the auto-termination option, your FD account is shut on maturity and the total amount, including your original investment and the interest earned, is transferred to your savings account.
Treatment of company FDs on maturity
When you invest in a company FD, the financial institution will remind you about the maturity 3 before the due date. A sourcing agent will inquire about what you want to do with your maturity amount. In case you wish to renew your FD, you may have to visit the branch or carry out the process online. Usually you are required to complete the renewal process 7 days prior to the maturity date.
While renewing an FD, you have an option to choose between investing only the principal amount or the total returns (including your interest payout) on maturity. In case a fixed deposit is unclaimed, the maturity amount will be transferred to the bank account as per details given by you. Some companies also offer an auto renewal option to renew your FDs automatically for the same tenor.
If you’re unsure of whether you should renew your FD, take a look at why it is better than withdrawing the amount at maturity.
- It attracts higher interest upon renewal
- It eliminates unnecessary expenditure
- It builds your wealth steadily and in a risk-free environment
- It simplifies your FD investment processes
When you invest in a company FD, unlike other investments, you don’t have to worry about remembering the maturity date as the issuer will remind you well in advance. One company FD that offers this facility is Bajaj Finance’s Fixed Deposit. Here you can earn interest up to 8.75% if you are a regular citizen and up to 9.10% if you are a senior citizen.
In addition, you can enjoy benefits such as online application, doorstep document pickup and high credibility ratings from CRISIL and ICRA. In fact, before investing, you can check the maturity amount using the FD rate calculator. In this manner, you can forecast your returns and plan your investment accordingly.
With this information, you can manage your FD investment smartly. To ensure that your FD caters to your needs, choose whether you want periodic payouts or if you’d like your returns at maturity.