FD Auto Renewal

Enjoy peace of mind with Fixed Deposit Auto Renewal. Your investment grows automatically without you having to lift a finger.
Fixed Deposit Auto Renewal
3 min

Fixed deposits (FDs) lock-in your investment for a fixed tenure at a pre-given interest rate. Your investment keeps earning stable returns during the deposit tenure. Given the benefits of FDs as a liquid asset and their steady returns, most investors prefer staying invested even after the maturity date. To simplify such renewals, investors can opt for the FD auto-renewal option when opening the account.

Auto-renewal of fixed deposit 

The auto-renewal feature in an FD account lets investors automatically renew their fixed deposits upon maturity. Offered by banks and other financial institutions, FD auto-renewals reinvest the corpus for the same tenure as the original deposit but at the prevailing interest rate. Depositors need to provide standing instructions to the bank for such auto-renewals.

How to renew a fixed deposit

Your FD account can be renewed once it reaches maturity. Depending on the financial institution in question and the type of FD offered, you can renew your fixed deposit account in one of the following ways:

Also Read: Right Time to Invest in a Fixed Deposit

Automatic FD renewal 

FD auto-renewals are permitted when the depositor gives the bank a standing instruction to renew the investment on maturity. You can choose the auto-renewal FD option at the time of opening the account or at any time during the course of its tenure. With the auto-renewal option enabled, the bank will automatically reinvest your FD funds for the same tenure at the current interest rates.

Manual FD renewal

If the financial institution does not offer auto-renewal on FD accounts, you can renew them manually at the end of the term. While most banks allow online FD renewals, you can also visit your home branch to renew the FD in person. You can choose to renew the FD for the same term or a longer duration based on the available options and prevailing interest rates.

Also Read: How repo rate impacts FD rates

FD auto-renewal benefits 

  • Convenience: The FD auto-renewal mandate is a boon for investors with multiple FDs. With auto-renewal enabled, investors do not need to remember the maturity dates for different FDs. Moreover, auto-renewals eliminate the need to physically visit a bank branch or renew your deposit online. This saves both time and effort, ensuring a convenient and hassle-free experience.
  • No documentation: Auto-renewal of FDs does not require any additional paperwork or documentation. You can simply tick the ‘Auto Renew’ option on the FD form to avail of this facility.
  • Continued earnings: Depositors can keep their funds invested in the FD account to consistently earn interest without any breaks. The compounding interest benefit helps investors maximise their earning potential.
  • Prevent defaults: Your matured FD corpus is transferred to the linked savings account or a non-interest-bearing account if you forget to renew it. Auto-renewal of FDs prevents this scenario. It functions like a safety net, keeping your funds invested for continuous interest income without any interruptions.

Things to consider when auto-renewing your FD

Despite these benefits, auto-renewal of FDs may not always be the best option. Apart from understanding the new rules for auto-renewal of FD at your bank, you should also consider these factors:

  • Interest rates: While FD auto-renewals bring unmatched convenience and break-free interest earnings, you should carefully consider the prevalent interest rates offered by the bank. If interest rates are rising, it may be wise to withdraw the funds and manually invest them when rates peak. You also compare the interest rates of different banks before investing in the new FD.
  • Tenure: For accounts with an auto-renewal mandate, most banks reinvest the maturity sum for the original term duration. Depositors usually cannot adjust this term, and it may not be the tenure offering the highest interest rates. In such cases, investors can lose out on better returns.
  • Liquidity needs: You should carefully assess your liquidity needs when opting for the auto-renewal facility. If you anticipate sizable expenses around the maturity period of the FD, avoid choosing the auto-renewal option. Withdrawing funds for immediate expenses after renewal will attract penalty charges and reduce your overall returns.
  • Investment goals: Since our investment goals evolve with age and life stages, so should our investments. If you are a young investor eager to maximise returns and accept higher risks, it may be better to explore market-linked investments instead of auto-renewing your deposit. However, if you are nearing retirement, the stable returns and low risks associated with FDs might be the better choice.


The auto-renewal mandate simplifies and streamlines the FD renewal processor for investors. If you have multiple FDs and cannot track your maturity dates, it is best to opt for the FD auto-renewal facility. However, it is important to consider the pros and cons of auto-renewals before deciding to lock in your investment for a long duration.

Before committing to an auto-renewal FD, you also need to check the interest rates available on the account. For instance, corporate FDs like the Bajaj Finance FD help you maximise returns with high interest rates of up to 8.85% p.a. You can also enjoy ample investment flexibility with a number of tenure options and payout frequencies.

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Frequently asked questions

What is the best option to break your FD?
You can withdraw the funds from your FD account before maturity and transfer them to your savings account.
What is the fixed deposit auto renewal interest rate?
Under the auto-renewal facility, your FD corpus will be reinvested at the prevailing interest rate.
Can I renew my FD online?
Yes, most banks offer online FD renewal via their internet banking and mobile banking platforms.
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As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.