An auto-renew deposit, also known as an automatic renewal deposit or a rolloverdeposit, is a type of savings or investment account that automatically renews at the end of its term for another period, typically with the same terms and conditions unless otherwise specified by the account holder.
Under Deposit Insurance Cover Upto 500000.
Nomination Facility Of DepositA/c Holders, Share Holders, Locker Holders.
Here’s how auto-renew deposits typically work:
Initial Deposit: To open an auto-renew deposit account, you initially deposit a certain amount of money into the account. This initial deposit can vary depending on the financial institution and the type of account.
Term Length: Auto-renew deposit accounts have a predetermined term length, which can range from a few months to several years. During this term, your money earns interest at a fixed or variable rate, depending on the type of account.
Automatic Renewal: At the end of the term, instead of closing the account or withdrawing the funds, the deposit is automatically renewed for another term. This renewal usually happens for the same duration as the original term unless you instruct otherwise.
Interest Rates: The interest rate for the renewed term may be different from the initial term. It can be based on prevailing market rates at the time of renewal or set by the financial institution.
Flexibility: Some auto-renew deposits offer flexibility in terms of withdrawal options. For example, you may be allowed to withdraw a certain percentage of the principal or interest without penalty during each renewal period.
Penalties for Early Withdrawal: Depending on the terms of the account, withdrawing funds before the end of the term may result in penalties or loss of interest. It’s essential to understand the withdrawal terms and any associated fees before opening an auto-renew deposit account.
Notification: Financial institutions typically notify account holders before the maturity date of the deposit, informing them of the impending renewal and providing options for changes or withdrawals if desired.