How to Close Fixed Deposit: Online and Offline

An FD or Fixed Deposit is a fixed income policy that allows the depositor to save money for a fixed time at a fixed rate. The money is invested by the consumer for a certain tenure in return for interest evaluated at a particular rate. FD schemes are offered by commercial banks, Non-Banking Finance Companies(NBFCs), and other financial organizations. The time period for which the money needs to be deposited ranges from 7 days to 10 years. This type of policy is preferred over Saving Deposit policies because fd occur at higher FD interest rates and are comparatively safer. So, proper protection of the money and higher returns at the end of the tenure is ensured. There are several types of fixed Deposit accounts, namely

  • Tax Saving FD
  • Normal Fixed Deposit
  • Senior Citizens’ FD
  • Cumulative Fixed Deposit
  • Non-Cumulative Fixed Deposit
  • Flexi Fixed Deposit

Application of fixed deposit can be made via both online and offline mode. For online mode, visit the website of the chosen bank or NBFC. After the login procedure, select the open FD option and give the necessary details like the principal amount and tenure. After that, the necessary documents are needed, and that application is sent for processing. Offline mode, fill up the FD application form if there is an existing account. If there isn’t one, other documentation like address and identity proof are needed besides the document required for KYC. Now, let’s talk about how to close a Fixed Deposit via both online and offline mode. An FD can be closed before maturity and after maturity.

FD can be closed before it matures. However, such cases lead to a revised rate of interest, and a penalty becomes inevitable. Upon premature closing of the fd account, the interest amount is calculated over the time the period money was deposited at the bank for, and then the penalty is processed based on that. There are two types of closure offered by banking institutes regarding fd. 

  • Partial closure: If a certain deposit amount appears to be remaining after the partial withdrawal before maturity, the FD interest rate will be reinstated as the rate applicable for the amount remaining after the procedure, for the original tenure, the time period being counted from the day the deposit account was opened at the bank. 
  • Full closure and reinvestment into new FD: In case of the fd being prematurely closed for the sake of reinvestment into another scheme of fd offered by the same bank, the existing deposit would be subject to the penal rate of interest as prescribed by the bank on the date of deposit. Interest will be paid for the period the deposit has remained with the bank. The interest rate offered on the date of reinvestment of the fd will be applicable for the new fd as well.

Coming back to how to close a fix account. 

How to close an FD Offline by Visiting Branch while it’s premature:

  1. Visit the bank branch and get a form for premature withdrawal.
  2. Fill the form with necessary details such as name, bank account details, and Fixed deposit number, among others.
  3. Submit the document to the bank, and they will process your request.
  4. Once the Fixed deposit is closed, the funds will be credited to your savings account.

How to close an Fixed Deposit online while it’s premature:

Closing an fixed deposit online while it’s mature required the process to be done via the bank’s official website. The interface provided by websites of SBI, HDFC Bank, ICICI Bank, Axis Bank, et cetera are different and hence requires different credentials for the steps that follow. The steps in a gist are given below:

Visit the bank website.

  1. Give the necessary login credentials required like a login ID and password provided for net banking activities. 
  2. Select the service section you need.
  3. Choose the correct option that shows the necessary nomenclature for the premature closing of a fixed deposit.
  4. You will be asked to provide your fixed deposit number on entering that a cancellation form is going to be shown to you, which you need to submit.
  5. After it’s done, wait till the cancellation is processed by the bank, and you will be notified accordingly. Banks usually require more or less the same amount of time when a user opts for premature cancellation of a fixed deposit account. 

For more details regarding the closure of a fixed deposit, visit the necessary branch office or talk to people concerned to avoid discrepancies. 

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