Best for<\/strong><\/td>| Small, emergency, or short-term FDs<\/td> | Larger deposits, long-term goals<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
<\/strong><\/h2>\n\n\n\n<\/span>FAQs on FD Auto-Renewal and Manual Renewal<\/strong><\/span><\/h2>\n\n\n\nQ1. What happens if I don’t give renewal instructions before my FD matures?<\/strong><\/strong> Most banks auto-renew the FD for the same tenure at the interest rate applicable on the maturity date. The principal and the interest accumulated are both reinvested. If you wanted to withdraw the money or change the tenure, you’d need to contact the bank after the renewal and request a premature closure, which may attract a penalty.<\/p> <\/div> Q2. Can I change the tenure when my FD auto-renews?<\/strong><\/strong> Not automatically. Auto-renewal uses the same tenure as the original FD. To change the tenure, you need to give instructions to the bank before the maturity date or do a manual renewal.<\/p> <\/div> Q3. Is it possible to miss a better rate because of auto-renewal?<\/strong><\/strong> Yes and it happens more often than people realise. If rates have risen since you opened your FD, auto-renewal at the new (still possibly lower) rate means you might be getting less than what another bank is offering. Comparing rates before maturity takes very little time.<\/p> <\/div> Q4. What is reinvestment risk in the context of FDs?<\/strong><\/strong> Reinvestment risk is the chance that when your FD matures, the rates available for reinvestment are lower than what you were earning. Auto-renewal doesn’t protect you from this. Manual renewal lets you shop around and potentially move to a better rate or a different product entirely.<\/p> <\/div> Q5. Should senior citizens prefer auto-renewal or manual renewal?<\/strong><\/strong> Manual renewal is generally worth the effort for senior citizens, because the additional interest rate benefit (usually 0.25% to 0.5% above regular rates) can vary between banks and changes from time to time. Checking rates at maturity ensures you’re getting the best available senior citizen rate, not just the default renewal rate at your existing bank.<\/p> <\/div> <\/div>\n\n\n\n Disclaimer: <\/em>Fixed returns do not constitute guaranteed or assured returns. Investments in corporate debt securities, municipal debt securities\/securitised debt instruments are subject to credit risks, market risks and default risks including delay and\/or default in payment. Read all the offer related documents carefully.<\/em><\/p>\n\n\n\n
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