RD amount not credited to SB account after maturity on its own ?

POSTED BY puneetugru ON June 13, 2014 8:34 am COMMENTS (2)

Hello all,

I’m in kind of a fix (partly due to my own ignorance) and want your suggestion to come out of this situation.

Nearly 2 years back I opened an RD in State Bank Of Mysore (for 15 months duration) by visiting one of their branch (I’ve SB account in the same branch from past 8 years).

For 15 months, the RD amount was automatically getting deducted from my SB account (standing instruction/auto debit was given by me while opening the account).

The RD matured in the month of April 2014, but the accumulated amount (with interest) has not been credited to my SB account till now.

Instead, the RD has got renewed to another 15 months automatically (with 0% interest rate !!!), although no amount has been debited from my SB account till now for the same.

On asking the branch today about this, they told me to give a written request for closure of the RD (which I’m ok with).

But in this two months period, I’ve lost interest (4%) on accumulated amount (I did not check my account thoroughly via internet banking till now, for which I’m repenting now).

I’ve few queries in this situation

1. Is there a norm or rule to go to bank explicitly for closure of RD, in order to make it credited to SB account ? Is it ONLY customer’s responsibility to get RD amount credited to SB after RD maturity period or can the bank employee give an instruction while creating RD that after maturity period the amount should go to SB account ?

2. Is the RD amount not supposed to be automatically credited to SB after it’s maturity period (I don’t remember putting any instruction/condition for automatic renewal of RD while filling the form and automatic renewal of RD does not make much sense to me) ?

I’m asking above questions as the RD amount accumulated is huge and I’ve lost nearly 2 months interest payment on the same till now.

Kindly let me know your comments.

– Thanks,

Puneet Ugru

2 replies on this article “RD amount not credited to SB account after maturity on its own ?”

  1. Hemanth Chandra says:

    Please go ahead and argue with them why the RD was renewed for 0% interest and ask them to pay the penalty for losing the 4% interest

  2. rockingguy says:

    I’ve had similar issue with RD & FD accounts kept with Union Bank

    They have set ALL my accounts on auto-renew mode. I’ll have to go to bank with copy of passbook or receipt to close that account on date of maturity. Banks do that to show huge “cash” balance on their corporate balance sheet and keep the customer on “active” mode

    In your case, there’s no norm to automatically credit RD maturity proceeds to SB account. I think SBI netbanking allows you to set such option. Therefore, next time, try opening your RD account using SBI netbanking. You won’t have to visit branch and fill any form

    I don’t understand how RD account got auto-renewed with 0% interest. You may call SBI customer care and talk about that issue. Ask them to give calculation sheet which shows month wise deposit and interest credits

    Almost all banks levy pre-closure penalty, if you close account before maturity date. You may have lost some interest, since you closed RD account before maturity date

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