FD maturity mistake: Fixed deposit matured but you forgot to withdraw money? What happens to your amount? Renew or not?

When a fixed deposit matures, its payout depends on the depositor’s instructions and the bank’s rules. Here are your options and whether you should renew or not.

A fixed deposit offers predictable returns over a specified tenure, making it a preferred investment option for traditional or risk-averse investors. However depositors may sometimes fail to claim their maturity proceeds on time if they overlook bank notifications or do not receive them at all.

In such cases, the accumulated corpus does not simply disappear but the returns on the amount after maturity may differ from the original FD rate, depending on the bank's rules and whether the deposit was set up for automatic renewal.

What happens to an FD after maturity?

A matured fixed deposit may be repaid to the depositor or renewed depending on the instructions recorded for the deposit. Here's what happens to your money in different scenarios if you do not take any action post maturity:

• Automatic renewal: Some fixed deposits may carry an instruction for automatic renewal, wherein it can be continued according to the applicable renewal terms agreed upon during opening of the account.
• Credit of maturity amount: If the deposit carries a repayment instruction, the maturity amount may be credited to the depositor's registered bank account according to the specified bank's process.
• Interest on unclaimed proceeds: The Reserve Bank of India's (RBI) directions state that if the maturity proceeds remain unpaid, the amount will earn interest at the applicable savings account rate or the contracted rate on the matured deposit, whichever is lower.

What if the depositors passes away?