Can I extend the tenure of my existing bank FD?
Prachi Kuklarni, Auragabad
There is no option to extend the term of fixed deposits in banks. In practice, therefore, to get a longer term for fixed deposits than the existing fixed deposit you have, you will need to close your current fixed deposit and open a fresh fixed deposit at the prevailing terms and conditions. In case of premature withdrawal, the deposit may be subject to penalty, as prescribed by the respective bank on the date of deposit.
Of course, the interest on the new deposit will be at the rates prevailing on the date of such opening. On premature withdrawal, interest shall be paid only for the period for which the deposit is maintained with the bank and at the rate applicable for such period. On an alternative case, you can issue standing instructions to the bank to renew the fixed deposit on maturity for a certain period at the terms and conditions prevailing on the maturity date. If the purpose of the extension term duration is to hang on to a higher interest rate that you may have got earlier, then it might not be possible.