How to Close Fixed Deposit Account Online and Offline?

With the safety of our invested money to FD interest rates, FDs as well offer liquidity and we can access them at the time of requirement. We can continue our FDs till their maturity and they can be closed or surrendered before completing their actual tenure.

Let us see the process of closing an FD account, whether you have opened online or by visiting a branch of your bank or other financial institution. The main requirement can vary as per your bank, so you must know it from your bank before proceeding further for closure.

Note: Before knowing the process to close an FD, it is necessary to keep in mind that no bank allows premature closure of a tax-saving FD with a tenure of five years.

Comparison Between

Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund

Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund

Guaranteed Return Plans

Returns Before Tax

7.5% ^(TAX-FREE)

Returns After Tax

7.5%

Guaranteed Returns

Yes

Life Cover

Yes

Tax on Profit

Tax Free*

Risk

No Risk

Still Better than FD’s and Debt Mutual Fund

Fixed Deposits

Returns Before Tax

7% ^(TAXABLE)

Returns After Tax

4.8%

Guaranteed Returns

Yes

Life Cover

No

Tax on Profit

Taxable

Risk

Low Risk

Debt Mutual Fund

Returns Before Tax

8% ^(TAXABLE)

Returns After Tax

5.5%

Guaranteed Returns

No

Life Cover

No

Tax on Profit

Taxable

Risk

High Risk

VIEW PLANS

*For annual premium upto ₹5 Lacs

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.

Online Closure of Fixed Deposit

Closing a fixed deposit account can avoid any unwanted hassle and can save time. Here are the steps that you can follow to close your fixed deposit:

• Visit the website of your bank or lender.

• Login by providing your user ID and password.

• Go to the section that is for the service request.

• Choose the option that is prompting for ‘Premature closure of Fixed Deposit’.

• Input the number of your Fixed Deposit and submit the cancellation request.

• The process of premature closure is usually the same for most financial institutions.

Offline Closure of Fixed Deposit

Even though the procedure of premature closure is very convenient, offline processes can opt when you do not have access to the internet. The main steps for offline closure are mentioned below:

• Duly fill and submit the premature FD withdrawal form. Ensure you provide the details like the number of your FD, details of your bank account, your name, etc.

• Submit this premature FD withdrawal form with your ID proof as a photocopy of your PAN card. Upon completion of this, the FD will be closed. After this, the money either can be credited to your savings account, or you may have to submit a cheque in your bank account. This may depend on the lender to lender, and some financial institutes may leave the choice on you.

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.

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