2 min read
25 May 2021

Auto-renewals and withdrawals of FDs

Fixed deposits are a great way of investing your savings and multiplying your wealth. Since they are secure and risk-free, they’re the ideal choice when you don’t want to take market risks. However, while fixed deposits require significantly less monitoring as they promise fixed returns, you need to be watchful of the maturity date. Here is all you need to know about unclaimed fixed deposits.

Unclaimed bank fixed deposit

The procedure followed by a bank when a fixed deposit is unclaimed may vary according to the rules and regulations set down by the bank. Most banks tend to follow a similar direction when fixed deposits are unclaimed after the maturity date—they can pay the current savings account rate or renew the unclaimed fixed deposit unlimited times. This decision solely depends on the bank you have invested in. If a fixed deposit is unclaimed after two or three consecutive tenors, the bank may try to contact you for further instructions on how to go ahead with the investment. If the bank cannot track down the investor or nominee, it will continue to auto renew the fixed deposit at the current rate of interest. You can check FD interest rates in India first before deciding.

Additional Read: A simple guide to using a Fixed Deposit calculator

Unclaimed company fixed deposit

If you have invested in a reliable company’s fixed deposit such as the Bajaj Finance Fixed Deposit the company will ensure that it reminds you of the maturity date three months prior. A sourcing agent from the company will remind you of the maturity date and inquire about how you want to proceed. In most cases, you will need to visit a branch to renew the fixed deposit which must be done seven days before the maturity date. You have the freedom to choose between investing only the principal amount or the total amount of the principal with the interest gain. This process makes unclaimed fixed deposits a rare possibility. Even so, if a fixed deposit is unclaimed, the maturity amount is transferred into the bank account provided by the investor in the initial investment form. This is done using national electronic fund transfer (NEFT) or real time gross settlement (RTGS). If the electronic transfer amount bounces, the amount is sent to the investor in the form of a cheque.

The safer option

Both banks and companies try to avoid a situation wherein there is an unclaimed fixed deposit. However, the safer option about such a situation would be investing in a reliable company’s fixed deposit. The chances of an unclaimed company fixed deposit are less as compared to a bank fixed deposit. This is due to the company protocol of contacting customers well before the maturity date. Renewing FDs is profitable and has several advantages.

Benefits of renewing FD

Thus, if you have multiple investments and find it challenging to keep track of them, company fixed deposit is the better option for you. In addition to being reminded of the maturity date of your investment, you will also benefit from higher returns and more flexibility.

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