Fixed deposits, provided by banks and non-banking institutions are one of the safest forms of investment with a higher rate of returns than a regular savings account. The investor deposits the lump sum amount as he opens an FD account at a fixed deposit interest rates. FD is undoubtedly a good investment for higher returns, but what happens if you forget to renew your account or withdraw your finance at the maturity of your FD account? Why is it important to keep a tab on your fixed deposit?

What happens if you forget to renew or withdraw funds from your FD account:

Consider that you have invested Rs 50,000 in your fixed deposit account for ten years and you forget to renew or withdraw funds from your account after the ten years then banks may not provide you full interest on your accounts. Your account in this instance will become an overdue deposit, and if you further don’t renew or withdraw funds for ten years, then it will become an inactive account.

What can you do? : These are the following measures that you must take to avoid such circumstances:

  1. Using net banking- The best thing to do will be to open your fixed deposit account online. While opening an FD account online is easy and secure, the other advantage of using the net banking of your FD account is that the principal amount along with interest on your investments will be directly transferred in your account at the maturity period. Also, you can redeem or withdraw funds in case of any emergency easily with the net banking facility of your FD account.
  1. Auto-renewal- Using the auto-renewal facility for your FD account can help you to prevent the mishap of forgetting FD dates. If you have invested at a 10% rate of interest for ten years then after ten years your account will automatically be renewed for the same period at the same rate of interest despite the change in fixed deposit interest rates.
  1. Tracking your investment: Tracking your fixed deposit account is essential if you don’t want to forget your Fd maturity date. You must renew your fixed Deposit account within 14 days of the maturity date’ otherwise your account can turn to an inactive account.

Essential things to keep in mind while you are monitoring your FD accounts:

  1. While auto-renewal is a good option to avoid getting no interest or less interest on your investments, it won’t be a good option if the current interest rates on fixed deposits have increased. 
  2. You can modify the auto-renewal facility before the maturity period. To change the terms of auto-renewal of your FD account you have withdrawn your funds prematurely and may have to pay certain charges.
  3. Also, it is essential to keep an eye on changes in interest rates for the fixed deposit. Presently, the frequency of the rate of interest is changing more frequently based on the RBI policy.

Here is a rate of interest of different institutions:

BanksFD Rates
Bajaj Finance7.60% – 8.05%
PNB Housing Finance7.40% – 7.95%
HDFC7.30% – 7.55%
IDFC First Bank4.00% – 8.00%
Axis Bank3.50% – 6.75%

Thus, fixed deposits are a good investment scheme and to get the best returns on your investments, you must keep an eye on interest rates and remember the date of maturity of your fixed deposits.

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