The Reserve Bank of India (RBI) often keeps making new changes keeping in mind the convenience and safety of the customers. The bank has recently changed the rules related to fixed deposits.
If you have also got FD done in your bank, then this news can prove to be useful for you. This new rule has also been implemented for small finance banks, commercial banks, co-operative banks and local regional banks.
Where after the maturity of the earlier FD, if you did not withdraw the money, the bank would have extended the period of that FD and you used to get interest, now this will not happen. If the money is not withdrawn on completion of your FD, then the interest rate of the FD will be based on your savings account. Suppose you have got an FD in a bank for a period of 5 years and it has matured. But if you are not withdrawing money, then during this time two situations would have come to the fore.
If the interest rate on your FD is less than the interest rate available on the savings account of that bank, then the interest on your FD will continue to be paid by the bank. But if the interest you get on your FD is more than the interest rate on your savings account, then the interest on your savings account will continue to accrue. Therefore, on the completion of maturity, you can withdraw your money considering the circumstances, if you do not do this then you may also suffer loss.