How to Withdraw Money from Fixed Deposit After Maturity
Once your Fixed Deposit (FD) matures, you can decide to renew the scheme or withdraw funds. While the process of withdrawal depends on the financial institution, it is usually simple.
You can opt for different methods to withdraw money from fixed deposits after maturity. These include offline processes, involving a visit to the bank branch, or online modes, which offer greater convenience.
Check out how to withdraw a fixed deposit after maturity.
Steps to Withdraw Money from a Fixed Deposit Online After Maturity
Initiating the withdrawal process online via Internet banking is easy. Here is how to withdraw money from a fixed deposit after maturity online:
Log in to your account using your credentials and navigate to the fixed deposit tab
Look for the ‘Withdrawal’ option, and click on it
Select the fixed deposit details and follow the process to withdraw the funds
Once you place a request to withdraw a fixed deposit, you will receive the deposit amount in your linked bank account.
Steps to Withdraw Money from a Fixed Deposit Offline After Maturity
If you do not have access to the online banking services, you can also withdraw funds offline. Know how to withdraw money from a fixed deposit after maturity with the following steps:
Visit the nearest branch of the bank where you have opened an FD account
Confirm your intention to withdraw funds by providing your certificate of fixed deposit
Fill out a withdrawal form by entering all the mandatory details
After verifying your application for closing an FD, the bank will credit the principal and interest amount directly to your savings account.
What happens After FD Maturity
Say you do not give any instructions to the bank/NBFC on what to do after the maturity of your fixed deposits. One of the following actions will be taken on your behalf:
Auto-Renewal
The bank/NBFC automatically renews the deposit for a year or for the same tenure as the original deposit with the same terms and conditions.
Auto Liquidation
The fixed deposit is liquidated on the due date, and the proceeds are transferred to your savings account. The proceeds refer to the principal amount and the accumulated interest.
In some cases, there may be special provisions or terms listed by the financial institution when no instructions are provided. Make sure you go through them on the deposit certificate or other documents provided to you.
Making Smart Financial Decisions After FD Maturity
With the capital and interest now available to you, it is essential to navigate the options wisely. This helps maximise your returns and align your finances with your personal goals. Here are some of the options you have:
Reinvestment
If you do not require funds immediately, you can reinvest the funds at higher interest rates.
Use Funds for Immediate Needs
If you need funds for urgent needs, you can make a withdrawal and use them. Withdrawing after maturity also saves you from any premature withdrawal penalty that would apply if you withdrew funds before the end of the FD term.
Penalty for Premature Withdrawal
Fixed deposits generally incur a certain penalty for premature withdrawal, which can reduce the earned interest. This penalty typically ranges from 0.5% to 1% on the interest rate, depending on the bank’s policy and the duration of the FD. Therefore, if you plan withdrawals at maturity, it helps avoid these charges.
Explore Other Investment Options
If you are looking to diversify your portfolio, consider investing the withdrawn funds in other instruments.
Tax Implications
Account for tax planning when withdrawing funds from your FD account, which depends on your income and prevailing tax laws.
Conclusion
Withdrawing your FD funds after maturity is an easy process, whether you do it through online or offline ways. Once you know how to withdraw an FD after maturity, you can also explore several other options after your FD account attains maturity, like reinvesting the funds.
You, thus, need to make informed decisions about how to use your matured FD balance, while trying to get maximum possible returns, and avoid unnecessary penalties.
Frequently Asked Questions
Can I withdraw my FD on the maturity date?
Yes, you can typically withdraw your fixed deposit on the maturity date. Most financial institutions allow withdrawals on the maturity date or the next business day, if the maturity date falls on a non-business day.
Can FD be withdrawn immediately?
Yes, in some cases, you can withdraw your fixed deposit immediately, especially if you have an online banking account. However, it is always best to check with your bank or NBFC for its specific policies.
Can I withdraw my fixed deposit before its maturity date?
Yes, but you may face a premature withdrawal penalty if you break an FD before its maturity. This penalty varies depending on the bank/NBFC and the time remaining until maturity.
Can I withdraw my fixed deposit online?
Yes, many banks/NBFCs offer online withdrawal options for fixed deposits. Here is how to withdraw from a fixed deposit:
Sign into your online banking account.
Navigate to the ‘Fixed Deposit’ tab.
Select the FD account from which you want to make a withdrawal.
Follow the process for withdrawal.
What happens if I do not withdraw my fixed deposit after maturity?
If you don't withdraw your fixed deposit after maturity, the proceeds are usually credited into your savings account. However, if you have opted for an auto-renewal facility, the FD will be renewed for the same period and interest rate.
What documents do I need to submit for FD withdrawal after maturity?
At the time of withdrawal, you will need to submit a withdrawal application form with the bank.
How can I calculate the maturity amount of my fixed deposit?
You can use an FD calculator online. You can also manually calculate it with the help of the formula:
M = P + (P × r × t/100)
Where,
P is the principal
r is the interest rate
t is the tenure
n is the number of times interest is compounded per year
Why should I calculate the FD maturity amount before withdrawing?
Calculating the maturity amount is important. It will help you understand the total returns you can receive, which in turn will help you make informed financial decisions.
What is maturity instruction?
Maturity instruction is like a direction you give the bank on how to handle your FD at maturity, such as to renew, withdraw, or transfer your deposit.
Can I withdraw interest from my FD account?
If you opt for a non-cumulative FD, you get an option to get an interest payout on a monthly/quarterly/half-yearly/annual basis.
How do I write an application for breaking an FD?
Here is how to break an FD:
Write an application addressing it to your bank, stating your FD account details
Raise a request the premature withdrawal of funds and explain your reason if necessary
Following this, the issuer will initiate the proceedings and guide you accordingly.
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