Tag: rollover

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What happens in case no instructions at the time of maturity of a fixed deposit?

The fixed deposit comes to an end at the completion of its specified time period.

If the fixed deposit is with a bank then the individual would need to give instructions whether this needs to be continued.

Sometimes there are no instructions that are given and no action is taken at the time of maturity of the deposit.

In such a situation the bank will renew the fixed deposit for a similar time period as the initial deposit.

The investor would need to go later and get the updated deposit details from the bank.

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Is the amount of the rolled over deposit the same as the initial investment?

The investor has a choice when it comes to the amount of the roll over of the deposit.

They can choose to take out the interest earned on the existing deposits and just continue with the initial deposit amount.

This is more likely when the interest is being paid out.

In case of a cumulative deposit the investor can reinvest the whole amount with the interest accumulated or they can take out the interest and reinvest just the initial amount.

Giving the right instructions to the bank is essential in making the choice for the investor,

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What is meant by rollover of a fixed deposit?

A fixed deposit will mature at the end of the specified period chosen by the investor.

The investor can take the initial amount invested at this point of time and use the funds for some other purpose.

The other option available for the investor is to continue with the fixed deposit for some more time period.

This continuation of the fixed deposit is known as a rollover as the deposit continues.

The rollover can be for same period as the initial fixed deposit or the investor can also change it to some other period.