Fixed Deposit Beginner

How to renew your FD account

Renewing your FD account

So you’ve chosen the Fixed Deposit (FD) investment option after wracking your brains for months. You know it has guaranteed returns, with a fixed interest rate and a fixed tenure, and all that works for you. But you want to know what happens when your deposit matures. “Will you have to wait for the money to come back to you before you create a new account?” you’re wondering. But why wonder when there’s Switch here to tell you how to renew your FD account?

How to renew an FD: Methods of renewal

When your FD term ends, you can renew or withdraw your account. If you renew your account, the money is reinvested in an FD. But you won’t need to wait for the term to end to decide. The auto-renewal option is something banks will ask you about at the time of setting up the account itself. But there is any other way to renew your fixed deposit account. Learn about both ways in this section.

How to auto-renew an FD

Auto-renewal of fixed deposits refers to the automating of reinvestment in an FD. While setting up your account, the bank or financial institution will ask if you wish to renew at the end of the tenure. You should also be prepared to specify whether you wish to renew only the principal amount or if you want to reinvest the interest, too. Auto-renewal ensures that the bank renews the deposit at the running rate of interest. The term stays the same, too.

While you can select auto-renewal while investing in the FD, you can also opt for it anytime during the deposit.

The current interest rate can be more or less than the earlier rate. So the renewal can be detrimental if the interest rate falls.

How to manually renew an FD

The alternative is to do it manually by going to the bank’s branch or visiting its website. If you want to renew your fixed deposit, your bank will do it at the same interest rate and for the same term. The running interest rate can be more or less than your previous FD interest rate. Manual renewals allow you to think it through and research before reinvesting.

Essential terms for FD renewal or withdrawal

These are a few terms about FD renewals and withdrawals that you should know. In this section, we break them down for you.


The principal investment amount and the generated income can be withdrawn if the deposit matures. One can, however, only withdraw the interest.

Premature withdrawal

This refers to an FD holder withdrawing their money before the term of the deposit ends. Some banks charge you a penalty for doing this.


Renewal is when the holder wants to renew her deposit for the same term at maturity. One may or may not choose the auto-renewal option to process the renewal.


Auto-withdrawal is when the interest plus principal deposit is credited to the customer’s savings account at the end of the deposit term.


This is when the depositor instructs the bank to automate the renewal of the FD for the same tenure at the original interest rate.

What happens if the FD is not renewed or claimed?

You, as a depositor, must instruct the bank to renew your FD automatically if you want it done. Otherwise, the bank will inform you when the maturity date is near. Nowadays, banks ask you what they should do post-maturity. So FDs not being claimed is a rarity or impossibility. The money is credited to your bank account if you don’t select auto-renewal.

National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) is how the funds are normally transferred. In the rare event of an electronic transfer failing, a check is issued in the investor’s name.

How to withdraw the FD amount

So far, we have seen how renewal works. Now let’s turn our attention to withdrawals. One of three scenarios usually plays out.

1. Post-maturity manual withdrawal

Once the maturity date arrives, you can collect the principal sum and the interest if you wish to. You can process the withdrawal manually if you have not selected FD auto-withdrawal. Maintaining proof of all deposits is essential for this process to go smoothly.

2. Automated withdrawal

When the FD term is over, with automated withdrawal, the bank transfers the relevant sum to the depositor’s savings account.

3. Premature withdrawal

Premature withdrawal is when the depositor closes the account before the term ends. To withdraw money prematurely, a penalty will have to be borne. The penalty money is deducted from the interest, and the remaining money is credited to the savings account. You can read more about premature withdrawals here.


Remember to take stock of all possible variables before renewing or withdrawing. The interest rate, maturity date, and tenure are all important considerations.


How do I renew my fixed deposit?

To renew your fixed deposit, sign in to your bank’s portal, provide necessary details, and follow the renewal process. Some banks also offer auto-renewal features for convenience.

What happens if FD is not renewed?

If an FD is not renewed, it may be treated as overdue. The bank could auto-renew it at the prevailing interest rate, and delay may impact interest rates.

Can I extend my FD before maturity?

Yes, you can extend your FD before maturity by visiting the bank and following their process. This allows you to continue earning interest with the same deposit.

What are the benefits of auto renewal of FD?

Auto-renewal of FD ensures a seamless process, preventing lapses in investment. It saves time, avoids the hassle of manual renewal, and maintains a continuous stream of interest.

Disclaimer: Fixed deposit products are generally considered safe investments as they are not subject to market fluctuations. However, investors are advised to exercise caution while investing in FDs. Risks include the financial position and solvency of the issuing company/entity during the tenure of the deposit. The facts mentioned in this article are for informational purposes only and should not be considered investment/financial advice from CoinSwitch.

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