How to Renew Fixed Deposit?

Hey guys. A few months ago, my father’s fixed deposit (FD) matured, and I wasn’t sure how to renew fixed deposit without losing interest. So, I researched and found that you have two primary renewal options: auto-renewal or manual renewal to renew FDs. I have shared more details about it below.

How to Renew FD?

You can renew your FDs either by using automatic renewal or manually renewing.

Auto Renewal

Auto-renewal means that you give a standing instruction to your bank or financial institution, either at the time of opening the FD or anytime during its tenure.

When the deposit matures, it automatically renews for the same term at the prevailing interest rate. It may be higher or lower than your original rate without requiring any further action from your side.

Manual Renewal

Alternatively, if you prefer control, manual renewal allows you to visit a bank branch or use online banking or the mobile app to renew the FD when it matures. In this case, the renewed FD again runs for the same tenure and typically at the prevailing interest rate, which is often different from the original one.

If you neither opt for auto-renewal nor manually renew, the bank will, by default, credit the maturity proceeds principal plus interest into your linked savings account via NEFT or RTGS. If the electronic transfer fails, they may issue a cheque to you instead.

When choosing between auto-renewal and manual renewal, consider your financial priorities: while auto-renewal offers convenience and ensures continuous reinvestment, it exposes you to reinvestment risk.

Wondering how to renew fixed deposit? Renewing a fixed deposit (FD) in India is a straightforward process that can be done either automatically or manually, depending on the instructions given at the time of opening the FD. Here’s a step-by-step guide to renewing an FD:

• If you opted for automatic renewal (auto-renewal) when opening the FD, the bank will automatically renew the principal amount or the principal along with the interest accrued for the same tenure at the prevailing interest rate on maturity.

• You don’t need to take any action if the auto-renewal option was selected. The bank will issue a new FD receipt upon renewal.

• Banks typically send reminders about the maturity of your FD. Check your SMS, email, or bank statement for notifications. You can visit the bank branch with the original FD receipt and a valid ID. Inform the bank officials of your intention to renew the FD.

• If the bank offers online services, log in to your net banking account. Navigate to the FD section, select the FD due for renewal, and choose the renewal option. Specify whether you want to renew the principal amount only or both principal and interest.

• Select the tenure for renewal and confirm the interest rate offered by the bank. You may choose a different tenure or modify the amount for renewal. Confirm or update the nomination details and terms for the renewed FD.

• Check the current interest rates offered by the bank. Rates may vary, and choosing a different tenure might yield better returns.

• Interest earned on FDs is taxable. Consider the tax implications and, if applicable, submit Form 15G/15H to avoid TDS deduction if your total income is below the taxable limit. Understand the penalties for premature withdrawal of the renewed FD, if needed.

• Upon renewal, the bank will provide a new FD receipt, either physically or electronically. Ensure that all details are correct and keep it safe for future reference.

Renewing an FD can be easily managed, whether in person or online. It’s essential to review the renewal terms, current interest rates, and consider any changes in financial goals or market conditions before proceeding with renewal. This is how to renew FD.

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As per the RBI guidelines for FD auto renewal, when FDs mature, they can be automatically renewed or withdrawn. The auto-renewal period and interest rate have to match that of the matured one. The decision to automatically renew the deposit ought to be made in light of the urgent need for funds.

What is the Process of Renewal of FD?

When an FD matures, it can be withdrawn or renewed.

The renewal clause has an auto-renewal feature, which means that when your deposit matures, the bank or financial institution will automatically renew it for the same term and interest rate. If you have invested money but are unsure of what you will do with it, the FD renewal process is an excellent option.

The depositor's Bank account receives the maturity amount from the bank if they opt out of auto-renewal or do not withdraw their funds. Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) are the two most widely used transfer methods (RTGS). The bank will provide the investor with a cheque if an electronic transfer fails.

I hope this helps!

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When your FD matures, you will receive the original investment plus interest income. You can renew your FD in order to keep on generating more. This post will guide you about the auto renewal of fixed deposit.

What are the RBI guidelines on fixed deposits renewal?

A fixed deposit's renewal may be selected prior to or on the day of maturity. You can choose to have your FD automatically renewed from banks and NBFCs. The service that allows the deposit to be reinvested after maturity is known as auto-renewal of an FD. When you set up the deposit account, you will have the choice of auto-renewing your FD deposit. You can decide whether you wish to reinvest the entire deposit with interest upon maturity or just the principle. You will only be given this choice if you haven't already chosen auto-renewal. Now you know how to renew fixed deposit.

What are the ways for extending a fixed deposit?

• You need to present the deposit certificate at the bank or NBFC office where you created the fixed deposit.

• The bank or NBFC will issue you with a form confirming that you want to renew the FD following demand.

• The loan company will extend your deposit so that it can continue to collect interest for the following phase of the chosen time.

What are the main factors about the FD auto-renewal?

• An auto-renewal or auto-termination condition is included when you open an FD with a bank or NBFC. It becomes effective once the FD reaches maturity and is not cancelled.

• Your FD may be renewed under the auto-renewal of fixed deposit terms for the same duration and rate of interest as the last FD. The same interest rate as your prior term will apply to this FD auto-renewal regulation going forward.

• The bank cancels your FD in accordance with the auto-termination agreement. Then it moves the funds into a standard savings account at the current FD interest rate.

This is all I had to say about the auto renewal of fixed deposit.