what happens to fd after maturity?
When you open a Fixed Deposit (FD) in a bank or post office, you invest a certain amount of money for a fixed time period (say 1 year, 3 years, or 5 years). This time period is called the tenure. At the end of this tenure, the FD is said to “mature.” On the maturity date, the bank/post office gives you back the money you originally deposited (principal) along with the interest earned over the tenure.
This is where many people get confused. If you don’t give any instructions to the bank/post office:
Some banks automatically renew the FD for the same tenure at the prevailing interest rate.
Others may transfer the maturity amount into your savings account.
At maturity, you can choose to Withdraw the money (transfer to savings account or take a cheque/DD). You can also renew the FD for another tenure either the same amount, partial or with additional top-up.
After maturity, your FD money is yours to withdraw or reinvest. But if you do nothing, the bank may either auto-renew or just keep it earning lower interest. Always check with your bank and give instructions in advance to avoid losing out on better returns.