How to Close Fixed Deposit Account Online and Offline?

Closing Fixed Deposit Online and Offline

Fixed Deposits can be closed on maturity or before completing the tenure (premature withdrawal), with a penalty affecting FD interest rates to cover expenses. Fixed deposits can be closed online and offline by following these common steps: 

Closing FD Online: 

Step 1: Visit the website of your bank or lender.

Step 2: Login by providing your user ID and password.

Step 3: Go to the 'Fixed Deposits' or 'Service Request' section.

Step 4: Select the type of FD you wish to close. 

Step 5: Click on ‘Close FD’ or ‘Premature Closure’.

Step 6: Enter the required details, including the number of your fixed deposit and the account linked for credit, and submit the cancellation request.

Step 7: After processing your request, the bank will credit funds to our linked savings/current account.

Closing FD Offline: 

Step 1: Go to the nearest branch of your respective bank with your FD certificate and ID. 

Step 2: Ask for the FD closure or premature withdrawal form.

Step 3: Duly fill the form with complete details. 

Step 4: Submit the form with the original FD certificate and ID. 

Step 5: After processing your request, the bank will credit funds to our linked savings/current account the designated bank account. 

Closure of an FD on Maturity

Different banks may have different requirements, but one primary requirement is to surrender the fixed deposit certificate after getting it signed by all its holders. In addition to this, you may need to submit a signed form indicating that the FD can be closed on the date of maturity. The maturity proceedings after the due date can be transferred to the savings account. In the case of an online fixed deposit, the option for renewal or closure of the FD on the date of maturity can be performed online. The maturity proceedings are credited to the savings bank account.

Moreover, unless you or other depositor acts, the bank has two methods for dealing with a matured fixed deposit on the due date. These two methods are:

• Auto-Renewal: The bank may renew the fixed deposit automatically on the due date for the term of the fixed deposit or one year.

• Auto Liquidation: The fixed deposit gets liquidated on the due date and the bank transfers the amount to the savings account.

It is recommended to check the terms and conditions mentioned on your fixed deposit certificate, the deposit or receipt, deposit advice, or receipt for knowing what will be applicable in this case of FD withdrawal.

Early Closure of Fixed Deposit

You can close your Fixed Deposit account before completion of its maturity tenure, but the FD interest rates may be revised and sometimes a penalty might have to be paid. Upon premature withdrawal or closure of fixed deposit, the interest will be paid according to the rate of interest that is applicable for the tenure during which the FD was kept within the bank and then a penalty will be levied. Once you close the FD, the accumulated funds will then be transferred to your savings account.

You can prematurely close the fixed deposit for your personal use or can reinvest in a new fixed deposit account at a higher rate of interest. In the latter case, you must consider the penalty before withdrawing your fixed deposit and then only reinvest. This process includes filling a form with the bank and indicating whether you require partial or entire funds in your savings account, and the remaining amount or balance can be reinvested at a higher interest rate.

• Partial Closure: After partial closure of fixed deposit, the FD interest rates are revised as per the applicable rates on the remaining amount for the actual tenure that is most recent on the opening date of the FD.

• Complete Closure and Reinvestment into New Fixed Deposits: When the FD is closed prematurely for reinvesting into another FD scheme, then a penalty can be levied on the existing scheme according to the bank. The FD interest rates on the new FD are paid as per the recent rates on its date of reinvestment.

The Final Words!

The offline process of closing your fixed deposit scheme can be time-consuming, and if your financer is far from your place then it can be tedious as well. However, with online closure, you do not have to travel, or it is instant. One issue that you may face while trying to close your FD online is an internet issue if you do not have high-speed internet. But, today with the easy availability of high-speed internet, this is again not an issue. In the end, it is up to you to choose a process for closing your fixed deposit.