Investment is something that we all do for securing our future. There are situations for which we are prepared beforehand and we plan our investments in a way so that we can easily meet them. These situations can be the wedding of our children and their higher studies. For such situations fixed deposits have always been well-known investment options especially among the investors who want to preserve their capital and are conservative in their investments.
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.
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:
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.
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.
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:
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:
|You may like to Read: PNB FD Interest Rates|
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.