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Fixed deposits are reliable financial instruments wherein you lock in your funds with an issuer for a specific period and interest rate. They are considered to be one of the most stable and secure options and can factor comfortably into almost any portfolio. 

 

This is because fixed deposits assure you of returns irrespective of market fluctuations. Best of all, you may book a regular or tax-saving fixed deposit based on your investing goals, and enjoy this benefit all the same. 

 

An important point to note here is that you have to withdraw your fixed deposit account or renew the same on maturity. Learning how to withdraw money from a fixed deposit after maturity is easy, as the process can be completed online or offline. 

 

After you place a request to withdraw a fixed deposit - either via net banking or by visiting an issuer’s branch, you will be allowed to get the amount you had invested. 

 

If you want to know how to withdraw a fixed deposit before maturity, you are allowed to do so after placing a request. However, you may be charged 0.5% to 1.00% of the interest rate as a penalty for premature withdrawal depending on the financial institution. 

 

If you break the fixed deposit before 7 days of investing in it, the bank will not pay you any interest on that. To know more about these processes and their nuances, here’s a guide on how to withdraw money from a fixed deposit after maturity.

How to Withdraw Money from a Fixed Deposit?

Fixed deposits offer the best convenience to the investor, as they can be opened and withdrawn without the need to visit the bank's branch office. If you wish to visit the bank for fixed deposit withdrawal after maturity, you can do so by submitting the required form and documents. 

 

Another easier way is to undertake the fixed deposit withdrawal process online via Internet banking. Follow these simple steps to learn how to withdraw money from a fixed deposit after maturity online.

  • Step 1: Log on to your internet banking portal using your login credentials and go to the fixed deposit tab. 

  • Step 2: Search for the option ‘withdraw FD’, and just click on it

  • Step 3: Select the fixed deposit details, and follow the process to withdraw the funds.

 

withdraw money from fd

FD Withdrawal on Maturity

Fixed deposits are becoming one of the most popular investment options in India for investors across age groups. Not only are they secure and easy to understand, but most issuers offer attractive interest rates, making them a viable choice for wealth generation.

 

Investing in a fixed deposit is a sure-shot way to keep your capital safe. It can also be liquidated with ease during financial emergencies.

 While you may not find it difficult to open a fixed deposit, you may be thinking how to withdraw money from a fixed deposit after maturity?

Here is a detailed process on fixed deposit withdrawal after maturity. One way of FD withdrawal is to visit the branch office of your bank in which you have a fixed deposit account.

 

Submit the deposit certificate to confirm that you wish to withdraw the fixed deposit on maturity. Additionally, you will also be asked to fill out an application for fixed deposit withdrawal after maturity and sign it. This confirms that the fixed deposit should be withdrawn after maturity. 

 

After completing this process, the fixed deposit amount – principal amount + accumulated interest – will be transferred to your savings account. Ensure that you fill in the right savings account details in your FD withdrawal application.

 

In case you fail to give any instructions to your issuer on what needs to be done after your FD matures, the issuer will then take action on your behalf in one of the following ways:

 

  • Auto Renewal

In this case, the bank will automatically renew the fixed deposit for a year or for the same tenor as the original FD with the same terms and conditions.

  • Auto Liquidation

Here, the fixed deposit will get liquidated on the due date and the bank will transfer the proceeds, i.e. the principal amount + the accumulated interest to your savings account.

 

While these actions may be acceptable, you should know how to withdraw money from the fixed deposit after maturity. In some cases, there may be special provisions or terms listed by the issuer. These may be listed on the deposit certificate or any other documents provided to you. 

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Penalty Charges For Premature Withdrawal of FD

A premature withdrawal facility in a fixed deposit allows you to withdraw the deposit before maturity. This comes as a great relief as you may need funds for a financial emergency or to deal with a cash crunch. However, in such cases, banks may ask you to pay a penalty to them as part of the process.

 

The penalty charges usually range between 0.5% and 1%, but it will vary from one issuer to the other. Another point is that a bank or a company is not liable to pay interest on fixed deposits that are prematurely withdrawn before 7 days from the date of booking the FD.

 

To help you understand this better, consider the following example. 

 

Example 1:

Consider a customer has invested in an FD of ₹1 Lakh at a rate of 7% for 2 years. Let us also assume that the interest rate for 1 year is 6.5%. The investor withdraws the FD after completing 1 year. 

 

In one year, he has earned interest @ 7%. But now, the issue shall recalculate the interest at revised FD rates, i.e. 6.5% – 1% (penalty charges) = 5.5%. The new rate will be 5.5%, and interest shall be paid at this rate, instead of 7%.

Parameters

Details

Principal Amount

₹1 Lakh

Interest Rate on a 2-year FD

7% per annum

Maturity Amount after One Year

₹1,07,186

Interest Rate on a 1-year FD

6.5% per annum

Premature Withdrawal Charges

1%

Final Rate of Interest Payable (with penalty)

5.5% per annum

Amount Receivable on Premature Withdrawal

₹1,05,614

Example 2:

Consider an investment in an FD of ₹1 Lakh at a rate of 6% for 2 years. Assume that the interest rate for 1 year at the time of booking is 7%, and the penalty rate for premature withdrawal is 1% of the effective rate of interest. 

 

The effective rate of interest is lower than the rate at which the amount was booked and the rate for the tenure that the FD has remained in the bank.

 

He withdraws from the FD after completing 1 year. In one year, he has earned interest @ 6%. But now, the issue recalculates the interest at an effective FD rate, i.e. 6% – 1%= 5%. The new rate will be 5%, and interest shall be paid at this rate instead of the previous 6%.

Parameters

Details

Principal Amount

₹1 Lakh

Interest Rate on a 2-year FD

6% per annum

Maturity Amount after One Year

₹1,06,136

Interest Rate on a 1-year FD

7% per annum

Effective Rate of Interest

6% per annum

Premature Withdrawal Charges

1%

Final Rate of Interest Payable (with penalty)

5% per annum

Amount Receivable on Premature Withdrawal

₹1,05,095

Conclusion

With all the information given above, it is understood fixed deposits are viable options for investors who need assured safety and guaranteed returns at flexible intervals of time throughout the investment timeline. Best of all, learning how to withdraw a Fixed Deposit after maturity is easy, and most issuers have digital provisions. 

 

To invest in an FD with favourable deals, apply via Bajaj Markets. Invest easily as you can get started online and find a deal that can help you truly grow your wealth. You can opt for a Flexi FD, senior citizen FD, tax-saving FD, or any other financial instrument that best suits your requirements.

FAQs

Yes, banks can auto-renew unclaimed fixed deposits if no action is taken by the account holder following the maturity of his/her fixed deposit.

Rather than focusing on how to withdraw money from a fixed deposit after maturity, you can renew your fixed deposit by visiting the nearest branch of your bank and informing the branch manager regarding FD renewal. 

 

You may choose to reinvest either the principal amount alone or renew both principal and interest accrued. You can renew your fixed deposit until 7 days prior to its date of maturity.

In instances where the fixed deposit is unclaimed, the issuer may choose to transfer the money to the account holder's savings account or may choose to renew the money to a new fixed deposit either for a year or for the same tenor of the original fixed deposit.

Renewing your FD is a viable choice if you have no immediate need for the funds or have other plans to invest. Parking the funds in a savings account is inefficient, which is why it is better to renew the FD.

Yes, you can withdraw your FD at maturity via the online or offline modes. Submit the FD withdrawal form and the proceeds will be credited to your savings bank account.

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