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Earn interest up to 7.95% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)

date-icon Last Updated on 16 Dec 2021 |
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What You should Know Before FD Renewal?

Fixed deposits have long been the bedrock of investments for the Indian middle-class. They are attractive to investors with a low risk appetite and who do not mind locking-in their capital. Investors, however, need to know that FDs can either be withdrawn at maturity or renewed. If the maturity date of your FD is approaching, you may feel confused about whether to renew it or liquidate. Hence, it becomes important to take a call on whether to renew or liquidate your FD at maturity. Here are a few things you should know before you make your decision.

It should be noted that the RBI guidelines on fixed deposit renewals state that banks are free to auto-renew an FD on maturity at the prevailing rate of interest if the investor does not apply for renewal.

FD Renewal: Benefits

  1. Easy Renewal Process: The FD renewal process with FInserv MARKETS is simple, requiring minimal documentation and paperwork.

  2. Low Risk: FDs are one of the most trusted forms of investment that helps to grow your savings over the long term without risking your capital.

  3. Curb Unneeded Expenses: By renewing your FD and conserving your savings, you ensure that your money is not whittled away in unnecessary everyday expenses.

To know maturity value of a fixed deposit, one can make use of FD maturity calculator that is available on Finserv MARKETS.

What Will Happen if You Forget to Renew Your FD?

Wealth creation requires active involvement and a constant monitoring of your investment portfolio. This applies to FDs too. Consider, for instance, the following two cases:


Case 1Suppose that you deposited ₹5 lakh in a Fixed Deposit for a duration of 5 years at an interest of 6%. At the end of 5 years, the interest rates fall to 5%. If you opted for the auto FD renewal, your bank would transfer your capital into another FD for 5 years and at the same interest rate of 6%. This is known as the auto-renewal of your FD at the same FD interest rate.


Case 2: Let us reconsider the same case of ₹5 lakh at an interest rate of 6% for 5 years. Suppose you forget the maturity date of your FD and after a year, you realise that your FD has already matured. You go to your bank and ask the authorities for withdrawal. In such a case, you will definitely lose interest from FD on the ₹5 lakh for the extra 1 year. This happens because your account was mentioned closed by the Bank as you did not renew your fixed deposit.

FD Auto Renewal: Things to Remember

  1. When you start an FD with a bank or NBFC, it comes with either an auto-renewal of fixed deposit or an auto-termination clause that kicks in once the FD reaches maturity and has not been withdrawn.

  2. Under the auto-renewal of fixed deposit clauses, your FD may be renewed for the same term and the same interest rate as the previous FD. This FD auto-renewal rule will be continued at the same interest rate as that of your previous tenor.

  3. Under the auto-termination clause, the bank terminates your FD and transfers the amount into a regular savings account at the prevailing FD interest rate.


  • ✔️What happens if FD is not renewed?

    If you do not renew your Fixed Deposit, it may either be auto-renewed or auto-terminated. In case of an auto-renewal, renewal happens for the same term period and interest rate as the existing FD, while in the case of an auto-termination, it is converted to a regular savings deposit with a lower interest rate.

  • ✔️What happens when a fixed deposit matures?

    FDs need to be either withdrawn or renewed upon maturity. If not done, they may be auto-renewed or auto-terminated. If you are not immediately in need of the funds, it is advisable that you opt for renewal of fixed deposit by submitting a fixed deposit renewal application.

  • ✔️Can I withdraw FD on maturity date?

    Yes, you can withdraw your principal amount along with interest upon maturity.

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