Our blood of investment lies in Bank FDs and we are very much feel safe by investing in FDs. But there are some instances like you deposit today for around 10 Yrs or so and after that you forget it to claim or renew. So what will happen in this case?
Note:- Refer the latest updates on FD rules “RBI FD Rules 2021 – Auto-Renewal FDs discontinued? “.
Let us take an example. Suppose Mr.X deposited Rs.1,00,000 for tenure of 5 Yrs. But due to his busy schedule or huge investment data he forget to track this Bank FD and neither he withdrawn it nor renewed it. He approached the bank stating that bank need to give him full interest as of applicable FD rate till the period of withdrawal but not maturity date. But bank refused to do so. So what are current laws related to this and how one can avoid such problems?
1) Choose to deposit through net banking-If you have net banking facility for transacting your bank account. Then it is always best to invest in FDs through net banking. Advantage of this is, on maturity date amount will be credited to your account directly without any hurdle or remembrance from your side. Also using this platform for investing in FD will have one more advantage. In case of emergencies you can redeem it instantly and amount will be your savings account. So from both point of view this type of investment is always good.
2) Choose auto renew option-You have two options while depositing. One is auto renew and second is deposit of amount to your account after maturity. If you choose auto renew option then banks will automatically renew your FDs at same tenure for a that day’s applicable interest rate. But here in this option even though you feel your amount continually earn return but have two drawbacks.
First drawback is you may loose some % of interest part. Notice in below image of HDFC current bank interest offerings.
Now the best offer is to deposit for 1 Yr 16 days as the interest is at 9% but for 1 Yr 17 days it is 8.75%. Thinking so if you deposit for 1 Yr 16 days and chosen the auto renew option. But later on Bank changed it’s offering slab like for all 1 Yr 16 days deposit interest will be 8.75% . After maturity your deposit will get auto renewed to same tenure of 1 Yr 16 days and have possibility to earn less than 1 Yr 15 days or 1 Yr 4 days deposit. You will not get any notification for this from banks. I noticed such slab with HDFC but not with SBI or ICICI. So check for such slabs before investing. Also if you forget to notice that during your maturity such things may earn you lesser return.
Second thing is you planned to invest Bank FD for two years but opted for 1 Yr deposit initially and then auto renew option. In case you need money after auto renew and before maturity then there is penalty as early withdrawal.
Hence it is always advisable to track your FDs maturity.
3) Track your own investments-In India still online banking penetration is less. So people still transact through physical mode. So in this case there is a greater possibility that you may forget the exact date of maturity and so by earn less. Do remember few rules about forgetting to renew your deposit.
By gazing through all above option you might find that the best available options are either to choose internet banking for investing in FDs or track your deposits for maturity properly.
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View Comments
Dear sir if I invest 5 lakhs for 10 years, if I opt auto renewal option it will automaticaly will be extended for another ten years,and if I closes the fd after 1 year of auto renewed fd the premature penalty will attract for only 1 year's intrest or the whole 11 year's intrest
Dear Prahlad,
The premature penalty will be applicable for only 1 year.
Hello sir ...
I did a fd in 2011 for 15 months......and it was renewed by my side in 2013 for next 15 months...then I had totally forgotten about. It..and then in 2021 the bank credited it in my saving account only amount that was payable on 2013...and did not give a penny of interest after 2013...I have been visiting bank for two year to resolve this issue.now ther are saying they will only give saving account interest from 2013 to 2021...plz suggest me what should I do...
Dear Bheem,
They have to give the FD rate applicable for the period of 2013 to 15 months. Post this period, savings account rates.
Sir I forget to renew my fixed deposit from last 1 year what will happen
Dear Neelesh,
Refer above post.
Sir i want to know if I had to break my ff in between do i also need to carry my fd renew slip for breaking the fd
Dear Kanchan,
Sadly they ask.
Hello Sir , does changing Name in bank account ( Spelling Mistake ) can create any problem with your Old fd's ?
Dear Sakshi,
I don't think so.
Dear Sir,I have an fd in PNB dated 4.1.20,due to covid situation I forgot to collect fd certificate from bank.Bank lost the certificate now asking me for indemnity bond for issuing new certificate.Is there any RBI guidelines that states if the customer did not collect the fd certificate within 90 days,bank is not responsible .?
Dear Anirban,
Your bank is misguiding you. There is no such rule.
sir, i have a account in indiapost (2015)
But now i forget the details about them. Sir please suggest me how can I get them now.
Dear Yamini,
Approach the concerned post office.
Hi BasuNivesh,
My uncle did a FD in SBI on June 2015.He expired in Dec 2017. We don't know about the Fd details, Recently We found original copy of FD. We are following continuously with SBI Branch since three month's they are not able to identify FD details, they are saying account is in purged state. Apart form that no one is able to identify any other details. What might have happened to this account?how to get the FD amount. As far as we know FD suppose to exist.
Any suggestion would be appreciated.
Thanks
Ajay
Dear Ajaykumar,
They are misguiding you. Rather than waiting for their reply POLITELY, make sure to get it in writing about the status and raise a complaint against the branch immediately.
I have made a fd in syndicate bank,in 2008,under syn500plus plan.i renewed,till 2012,time to time.after 2 3 months after maturity,bank gave back date interest.
After 2014,I approached bank in Oct 2020, for fd to renew with backdate due interest as fd rates,they have not responded nor renewed it.
Let me know after deposited,I renewed fd 4 times after maturity date,bank gave me backdate effect, will this time I am eligible to get backdate effect or not.
Thanks.
Dear Vinod,
It is the leniency they showed earlier but not a right.
Respected sir,
I made an FD in 2005 with union bank on auto renewal basis and also having saving account with that branch.
every year bank renewed Fd since that time i am only operating my saving account.
as it crosses 10 years limit
is my FD became 'unclaimed deposit'???, as i am only operating my saving account/ current account not FD.
Dear Piyush,
As it is the auto-renew mode, your bank will renew it continuously. However, check whether the money is in FD or savings account to get clarity.