- When to close a Fixed Deposit Account?
- How to Close Fixed Deposit Account Offline and Online?
- How to Close ICICI Fixed Deposit Online?
- How to close a Kotak FD account online?
- Points to remember while closing a Premature FD Account
- Alternative to closing a Premature FD Account
- Frequently Asked Questions
A fixed deposit is quite popular among investors in India to secure an investment goal. You can invest in a fixed deposit for a period ranging from 7 days up to 10 years with a predetermined interest. Other than a tax saving FD you can liquidate your fixed deposit anytime and anywhere. You can withdraw after or before the maturity of the fixed deposit through your bank account. In this article, we have covered a step-by-step guide on how to close fixed deposit accounts online and offline.
When to close a Fixed Deposit Account?
You can close your fixed deposit account either on the maturity of your FD or before maturity i.e. premature withdrawal. On a closure post maturity, the amount is automatically credited to your bank account number. While in case of a premature withdrawal the amount is credited after deducting the penalty charges. It is always advisable to withdraw only after the maturity of FD. In case of emergencies, you can fulfill it by opting for other alternatives like a loan against an FD, credit card, and so on. In this article, we have covered such alternatives to premature closure of FD account as well.
How to Close Fixed Deposit Account Offline and Online?
You can close fixed deposits either online or offline. To close online you need to login into your internet banking saving or current account and request a closure. Alternatively, you can visit the nearest branch of the bank. Under this option, you need to submit an FD closure form along with the necessary documents such as fixed deposit receipt, identity proof, etc. Once your request is accepted, the FD will be closed and the amount will be credited to your account.
Closure of an FD Account on Maturity
Every different bank has different requirements for closure. However, the common requirement is that the withdrawal must be signed by the holder of such FD. The maturity proceedings will be transferred to the source bank account. In case you have opened the FD online you can also opt for auto-renewal and auto-liquidation of your fixed deposit. You must carefully read and understand the terms and conditions before investing. You must for details such as interest rate, maturity terms, liquidation, penalty on premature withdrawal.
- Auto-Renewal Fixed Deposit– You can instruct the bank over internet banking to auto-renew your fixed deposit on maturity. Further, you can either put the entire maturity proceeds for auto-renew or renew just the principal amount.
- Auto-Liquidation of Fixed Deposit– The maturity proceeds will be automatically liquidated on the maturity date and credited to your bank account
Premature Closure of Fixed Deposit
To close an FD account before maturity you need to either submit a request online or visit the nearest branch on the bank. If you have opened the FD account online then you can for sure go ahead with the internet banking route. However, in case you have opened the account offline by submitting a form at the branch then you may need to submit a closure form at the branch. In both the case, the proceeds will be credited to your bank account.
How to close SBI FD online?
- Login to your SBI Bank internet banking account. You need to provide your customer ID and password to login into your account.
- Go to the ‘Fixed Deposit’ option and click on the ‘e-TDR/e-STDR (FD)’ option. Here TDR stands for term deposit whereas the full form of STDR is Special Term Deposit.
- Click on the ‘Close Account Permanently’ option on the menu
- Here, you will view a list of all sbi fixed deposits in your account.
- Select the fixed deposit you wish to close and then click on the ‘Submit’ option
- You need to mention the reason for the closure of your fixed deposit under the ‘Remarks’ option.
- Click on the ‘Submit’ button.
- Once you click on ‘Submit, you will receive a ‘High-Security Password’ on your registered mobile number. Hence, ensure you have access to your registered mobile number.
- Enter the ‘High-Security Password’ and click on ‘Submit’. Once you have successfully closed the fixed deposit you will receive a confirmation on your screen with the message ‘Your e-TD/e-STD account has been successfully closed.’
- The fixed deposit amount will be credited to your savings account.
- In case you want an instant closure and credit in your account then initiate the proceedings within 8 AM to 8 PM. A closure request initiated after 8 PM will be processed by SBI Bank the next working day.
How to Close HDFC Fixed Deposit Online?
- Login to your HDFC account through internet banking by entering the NetBanking ID and Password
- On the left menu, you will find the option of ‘Liquidate Fixed Deposit’ under ‘Fixed Deposit’. Click on the ‘Liquidate Fixed Deposit’ option.
- Select the HDFC Fixed Deposit account number you want to liquidate from the drop-down menu
- Click on ‘Continue’ and confirm the details available on the screen. These details are your FD account number, credit into account number, transaction ID, etc
- The amount on liquidation will be credited to the source savings or current account. The source’s bank account is the account from which the FD was booked. The amount cannot be credited to another account or through demand draft.
- The liquidation online internet banking facility is available to customers holding a single ownership account status with the bank.
- You cannot initiate a partial liquidation of a fixed deposit. The entire amount of FD needs to be liquidated on closure.
How to Close ICICI Fixed Deposit Online?
- Login to your ICICI Bank account through net banking by entering your customer ID and password
- Go to the ‘My Account’ tab and click on ‘Deposits’. Now click on the ‘Service Requests’ option.
- Click on the Closure/Renewal of Existing Fixed/Recurring Deposit’ option
- Click on the ‘Request For’ option, select the ‘Premature Withdrawal of FD’ from the drop-down menu, and select the ‘Continue’ option
- Go through the information displayed on the screen and confirm. This information is the ICICI FD account number, amount, account number in which the amount must be credited.
- To authorize the liquidation of your fixed deposit account enter the digits from your debit card
- You will receive an OTP on your registered mobile number. Enter this OTP and continue
- On successful authentication of the OTP, you will receive a confirmation of your FD closure transaction. The confirmation will be sent to your registered mobile number and email address.
- The amount will be credited to the account that you have selected while raising the request
- Remember that you cannot cancel an FD closure request. Further, you cannot place a request for closure of Linked / Money Multiplier FDs online through internet banking. You will have to visit the nearest branch of ICICI bank.
How to close a Kotak FD account online?
- Firstly, login to your Kotak bank accounts through internet banking. You need to enter your CRN i.e. customer number and password to login
- Go to the ‘Investment’ option and click on ‘Deposit
- Select the ‘Premature Withdrawal of Deposit’ option from the menu. You will be able to view a list of existing fixed deposits with the bank.
- Select the fixed deposit you want to close and verify the details of Kotak FD such as amount, date of deposit, account number, etc
- Click on ‘Confirm’ and you will receive an authentication one time password OTP
- Enter the OTP. On successful authentication, you will receive a confirmation of the transaction on your registered mobile number and email address
- The amount will be credited to your account instantly.
Points to remember while closing a Premature FD Account
- If you have invested in a tax-saving fixed deposit then you cannot withdraw before the maturity date or the lock-in period expires.
- A premature withdrawal often attracts a penalty ranging from 0.5% to 2%. A few banks provide fixed deposits with no penalty on premature withdrawal. Hence you must always read and understand this condition while investing in a fixed deposit
- Some of the banks provide partial withdrawal from a fixed deposit account while others don’t provide. For example- let’s say you have deposited a sum of Rs 50000 in FD and you wish to withdraw Rs 30000 only from this FD account. This is known as partial withdrawal. Not every bank allows such a withdrawal. Hence, make sure you have ensured such a condition before investing in FD
Alternative to closing a Premature FD Account
A premature withdrawal from a fixed deposit will cost you a penalty and loss of interest income. You must always understand the bank’s terms and conditions before investing to make a well and thought through investment.
Before making the decision to withdraw, always do your research and math. Instead of withdrawing or closing your FD account, you can opt for other options. By opting for these alternatives you will continue the compounded interest on your FD and avoid unnecessary penalty.
- Loan against Fixed Deposit: You can avail of a loan against the fixed deposit. This will ensure you meet your short-term liquidity requirements at a lower rate of interest. Since you are availing the loan against collateral, the interest on such a secured loan will be lower than an unsecured loan. Additionally, you can avail of a loan against FD up to 90% of the fixed deposit amount.
- Credit Card Against FD: Just like secured loans, you can buy a credit card to fulfill your short-term requirements. Nowadays it is really very quick and hassle-free to get a credit card. You can also convert large spending into no-cost EMI. Many banks and financial institutions provide these no-cost EMIs for a period of 3 months or above.
- Break down your Total FD amount: Instead of investing a huge amount in one single FD account you can break that sum and invest in different FD accounts. This way you will be able to handle your short-term emergencies in a situation wherein you cannot opt for a loan or a credit card. For example- you want to invest say Rs 3 lakhs in fixed deposits. It will be better to break the sum of Rs 3 lakh and the invest. Let us say you invest Rs 50000 in different FD accounts with the same investment date and maturity period. After 2 months you need Rs 45000 to fund some emergencies. Here you need to close only one FD account instead of closing an FD of Rs 3 lakh. You will continue to earn interest on the rest of the FDs and avoid a higher penalty.
Frequently Asked Questions
Yes, the majority of the banks in India charge a penalty on the premature closure of FD. However, the rate of penalty differs from one bank to another. For example, HDFC bank charges a penalty of 1% while SBI bank charges 0.5% for retail investors investing less than Rs 5 lakh.
No, you cannot close a tax-saving FD before maturity. In fact, you will not find any option to withdraw from your bank account. However, the tax-saving FD can be closed before maturity only in the event of the demise of the FD holder
To stop your fixed deposit from auto-renewal to will have to inform your bank before maturity. You must provide instructions for canceling the auto-renewal to the bank. In case you don’t inform then the FD will be renewed automatically on maturity. Firstly, log in to your bank account and change the maturity instruction for a fixed deposit. Alternatively, you can call the 24*7 customer support of the bank. Lastly, you can visit the nearest branch and place your request.
Yes, in the case of a joint account, both the account holders need to sign the FD closure form.