Bank fixed deposits (FDs) have long been a preferred option for investors, particularly those who are cautious and want to protect their wealth. Bank FDs are known as term deposits in the banking industry since they have a set period that might be anything from seven days to as long as ten years. Depending on the tenure and amount, FD interest rate varies. However, in cases where there is a premature withdrawal, the bank may charge a penalty if withdrawn before a set period.
What happens to an FD when it matures?
In general, banks handle matured fixed deposits in one of the following two ways:
Depending on the tenure chosen by the holder, the FD is automatically renewed for the initial term or for a year.The principle and interest are automatically liquidated and transferred to the account of the holder.
Let’s look at how to close an FD, both on maturity and prematurely, whether it was opened online or offline by visiting a bank branch.
FD closure on maturity
You Might Also Like:
All maturity proceeds along with the initial investment will be transferred into your account upon the successful closure of the fixed deposit account. You can give the bank standing instructions on what to do when your FD matures when you open it.
It will be much simpler for you to close the FD account on maturity if you opened it online through internet banking when you first opened the account. All you have to do is go to the fixed deposits section of your net banking account. You can examine your investment’s status and choose to close or liquidate it there.Premature FD closure
Banks typically provide their clients the option to close their fixed deposits well in advance of the scheduled maturity date. As a result of the shorter tenure, you might not get the full interest on your investment and be subject to a fine. In other words, the interest will only be paid during the time that your deposit was held at the bank. The money will be sent to your account normally after you close the FD.
Whatever the cause, if you must close your FD before the date of maturity, be sure to consider the penalty fee (if any) and the interest loss you will suffer.
How to close SBI fixed deposit online
Here’s how to break an SBI FD online:
Step 1: Go to the official website of SBI (www.sbi.co.in).
Step 2: Click on the Fixed Deposit tab on the screen.
Step 3: Look for FD tab, called ETDR/STDR (FD). Click on it.
Step 4: There is an option “Close A/C Prematurely”. Click on it. A list will appear with your FD
Step 5: You can close a specific SBI FD by selecting it from this list. Proceed by clicking the button.
Check details and verify your FD account details like the date of maturity, amount deposited, and the like.
Step 6: You can state the reason for closure of the account and then hit on Confirm.
Step 7: Enter OTP (One-Time Password) on your registered mobile number and confirm
Step 8: After you click confirm, SBI will send you an email confirming that your SBI FD account has been effectively cancelled.
When you close your FD account online, the funds in your FD account will be transferred to your designated bank account.
How to close HDFC Bank FD online
Step 1: Login to NetBanking using your NetBanking ID and Password
Step 2: Select Liquidate Fixed Deposit option under the Fixed Deposit menu on the left
Step 3: Select the Fixed Deposit account number from the drop-down lists
Step 4: Click on Continue and Confirm the details entered
You can also go to a branch near you and present the deposit advise you received when you opened your Fixed Deposit Account. After all account holders have signed the deposit advice, it must be submitted.
