Application for Not Extending matured FD ( at bank )
Answers
Answer:
(FD), are a popular investment choice among Indians and is always subject to renewal and withdrawal. This applies to all types of term deposits including those in banks and those in Non-Banking Financial Companies (NBFC). Let’s say you open an FD account for Rs.3 lakh for 10 years at the rate of 10%. After the completion of 10 years, the term deposit will have to be renewed if you want to continue to hold to it. Otherwise, it has to be withdrawn. In case you forget to renew it, it will be auto-renewed for the same tenure if you have given maturity instructions. Renewal happens at the present interest rate that is offered on the term deposit.
It is very important to keep track of your term deposits, because if you completely forget to renew it, the maturity amount will be difficult to claim later or it may be paid to the nominee. Auto-renewal may prove disadvantageous if the bank has reduced its interest rates. On the other hand, premature withdrawal may be subject to penalty charges.
Explanation:
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