Fixed deposits (FDs) have been a tremendously safe and sound investment choice for anyone seeking secure and stable returns. When someone opens an FD, they deposit a sum of money with a bank for a fixed period and earn interest at a predetermined rate. At the end of this period, also known as “maturity”, the investor has the option to withdraw their principal amount along with the interest earned. They can also opt to reinvest the amount at the present rate. This article will serve as a helpful playbook on how to withdraw money from an FD after maturity. It’ll also explore the options available with leading banks in India.
Fixed Deposit Maturity Options
When an investor opens a fixed deposit, they can choose how the funds will be handled upon maturity. The two main options are auto-closure and auto-renewal.
Auto-Closure
If they select the auto-closure option, the bank will automatically close the FD on the maturity date and transfer the proceeds to the linked savings account. This option is suitable for those who wish to access their funds immediately after maturity without needing to take additional steps.
Earlier, customers could only open FDs in banks where they had savings accounts. But now, banks like ICICI Bank do not require investors to have a savings account with them.
Auto-Renewal
With the auto-renewal option, an FD will automatically be renewed for the same tenure as the original deposit. The new FD will earn fixed deposit interest at the prevailing rate on the date of renewal. If an investor chooses this option but later decides to withdraw the funds, they can do so through various channels provided by their bank.
Methods to Withdraw a Fixed Deposit
Major financial institutions like ICICI Bank offer several convenient ways to withdraw money from an FD after maturity, including digital channels and in-person visits.
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Internet Banking
One of the most convenient ways to close an FD after maturity is through the respective bank’s internet banking portal. Here’s how you can do it with ICICI Bank:
- Log in to your net banking account on the ICICI Bank net banking portal.
- Select ‘My Accounts’ from the bar menu.
- Click on ‘Deposits’ and then choose ‘Service Requests’.
- Select ‘Close or Renew Fixed/Recurring Deposit’.
- Fill out the online form displayed on the next page, providing the savings account number where the FD amount will be credited.
- Choose ‘Closing on Maturity’ and select your FD account number.
- Enter your registered mobile number or registered email address, or both.
- Click on ‘Submit’ and verify the details on the Request Confirmation page.
- Enter the One Time Password (OTP) sent to your registered mobile number and click ‘Submit’.
Once you complete these steps, a confirmation message will be displayed, and your linked savings account will be credited with the FD amount.
2. iMobile App
You can also close your FD using the ICICI iMobile app. Follow these steps:
- Log in to the iMobile app.
- Select the icon for ‘Accounts & Deposits’.
- Tap on ‘Deposits’ and select your FD account number.
- Choose ‘More Options’ and then select ‘Close FD’.
The FD account will be closed instantly, and the funds will be transferred to your linked savings account.
3. Bank Branch
For those who prefer an in-person approach, visiting a bank branch is a straightforward option:
- Go to your nearest branch with valid proof of identity.
- Fill out an FD closure form available at the branch.
- Submit the form along with proof of your identity to the bank representative.
Upon verification of your documents and request, the bank will close your FD and transfer the funds to your linked savings account. This method is also useful if there is a nominee associated with the FD, as the nominee will need to provide a death certificate and KYC compliance to claim the maturity value. Please note that some banks require customers to withdraw their FD from the same branch they opened it. On the other hand, some banks have the option for customers to close their FD from any branch.
4. Bank ATMs
Did you know FDs can be closed at an ATM as well? These are for more conservative amounts usually. For instance, if the FD amount is less than ₹50,000, you can close your FD at any ICICI Bank ATM. This is a quick and convenient method, especially for smaller deposits. Simply follow the on-screen instructions to close the FD and transfer the funds to the chosen savings account.
Premature Withdrawal of Fixed Deposit
In some situations, investors may need to withdraw their FD before it reaches maturity. This is known as premature withdrawal, and ICICI Bank allows this through several channels:
- Internet Banking: Follow the same steps as closing an FD on maturity but select ‘Premature Closure’ instead.
- iMobile Pay App: Use the same steps as mentioned earlier but choose ‘Premature Closure’ to withdraw before maturity.
- Bank Branch: Visit any ICICI Bank branch and request a premature closure by filling out the required form.
Penalties for Premature Withdrawal
Withdrawing funds from an FD before maturity usually incurs a penalty. However, no penalty is charged if the FD is withdrawn within a week of opening.
Conclusion
Withdrawing money from a fixed deposit after maturity with well-established banks is a straightforward process, thanks to the multiple channels provided, including internet banking, mobile applications, ATMs, and in-person branch visits. Today, banks keep their customers informed every step of the way with timely communication via mail, text, and notifications. Whether an individual chooses to withdraw on maturity or opt for premature closure, it’s always good to understand the terms and conditions, know all options, and be mindful of charges or penalties that may apply.
