Closing a Fixed Deposit Account in the UAE

Savings and investments are the options we have when planning our financial goals and future expenses. The expenses can be vacations, buying a car, children’s education and marriage, etc. When it comes to risk-free investments, fixed deposits are still a popular choice among investors. A fixed deposit scheme offers predefined interest rates on your investment for a fixed tenure. Since the interest rates do not fluctuate with market performances, deposit schemes are one of the safest means of growing your savings. In UAE, you can open a fixed deposit account with a small amount of AED 10,000 or above for flexible tenure ranging from 7 days to 10 years. Upon maturity, you may choose to reinvest the amount or liquidate it as per your requirements. 

It may happen during emergencies that you need to close your fixed deposit account, so you need to be aware of the fixed deposit account closing process. The article below acquaints you with the various ways of closing your account through online and offline modes. 

When Can You Close Your Fixed Deposit Account?

A fixed deposit account works in a way that it reserves your investment for a fixed tenure. You may earn the interest quarterly, half-yearly or annually depending on the account type, but the accrued interest is paid only after maturity. However, you have the option of terminating your fixed deposit account at any time, and you can apply for account closure before and after maturity. After maturity, the bank liquidates your investment and credits it into your bank account. If you have opted for auto-renewal, the bank reinvests the amount for another term. Closing an account before maturity attracts penalties on your earned interest and the charges depend on the bank’s terms and conditions. To avoid such penalties, you can consider alternatives such as loans against FDs and overdraft facilities that help keep your deposit account intact and you continue to earn interest. 

Closing a Fixed Deposit Account Prematurely

There can be several reasons to close your fixed deposit account prematurely. It may be due to a financial emergency or dissatisfaction with the account performance as the accounts may not be offering desired interest rates in recent times. A premature closure may bring additional account closing charges or interest deduction that has accumulated over time. 

The banks in the UAE have their own penalising criteria for the premature closure of a fixed deposit account and you should verify all the charges before terminating your account. Several banks and financial institutions offer fixed deposit accounts that allow premature or partial withdrawals. If you forecast a possibility of premature withdrawals, you should select deposit accounts with premature withdrawal options. However, you need to satisfy their terms and conditions separately. 

An online FD account has a much convenient account closure process where you can terminate your account anywhere at any time without having to visit the bank. On the other hand, if you have opened an offline account, you may need to visit the bank in person and fill the account closure form. Whatever mode you choose, the bank deposits your investment into your savings or current account. 

Closing a Fixed Deposit Account After Maturity

A fixed deposit is said to be matured after the investment tenure completes. You receive your deposits including the earned interest in your bank account as per the banking norms and regulations. Your bank may have the option of auto-renewal and auto-liquidation that you may choose according to your requirements. If you hold an online fixed deposit account, you can easily reinvest or withdraw your amount through an online application. For offline FD accounts, you may need to visit the bank and apply for liquidation or renewal. Closing a deposit account after maturity does not levy any charges. And on reinvesting, you get interest rates on the new principal amount, thereby compounding the profits in the forthcoming tenure. Prior to closing your account, you need to read and understand all the terms and conditions and the charges that the bank levies.

How to Close Your Fixed Deposit Account Online?

Closing a fixed deposit account online is a hassle-free and effortless process. You simply need to visit the bank’s official website, log into your deposit account and choose the account closure option. You can follow the steps given below for closing a fixed deposit account in the UAE. 

1. The first step is to visit the official website of the bank or financial institution in which you hold the fixed deposit account.
2. Use your login credentials, i.e. your account ID and password, to log into the deposit account. 
3. Once you are logged in, you need to navigate to the ‘Service Requests’ section or the ‘Services’ section. 
4. Subsequently, you need to select the ‘Close the Fixed Deposit Account Permanently’ option and enter the details asked. 
5. Follow the instructions as directed and enter the details as prompted. 
6. Later, the bank will send a confirmation code on your registered mobile number or e-mail id, which you need to enter during the account closure process.
7. Once verified, the bank will transfer the amount into your bank account in the next couple of working days. 

The account closure process remains the same for almost all the banks in the UAE. A few banks may have a slightly different procedure, and you need to simply follow the steps as directed to close your FD account. The process may take up to two days from the application date to transfer the amount to your bank account.

How to Close Your Fixed Deposit Account Offline?

At times, you may need to visit the bank to close your fixed deposit account if the bank does not provide online account termination or you haven’t opted for online banking services. To close a fixed deposit account offline, you need to follow the steps given below.

1. You need to locate and visit the nearest bank branch with all the documents related to your fixed deposit account. 
2. Ask your bank representative for the FD account closure application form. 
3. Enter the required details and reason for terminating your account. 
4. You need to enter the account details in which you want the bank to transfer the amount. 
5. Attach the relevant documents wherever required or as asked by the bank representative. 
6. After a successful closure application, the bank will deposit the amount into your bank account. 

The bank may take up to five working days for verification and completing the account closure process before depositing the amount into your bank account. 

Things to Keep in Mind While Closing a Fixed Deposit Account in the UAE

Following are a few things that you need to keep in mind before applying for a fixed deposit account closure in the UAE. 

• The banks in the UAE may have a lock-in period, and if you withdraw your investment before this period, the bank won’t offer any interest on your deposits. 
• If you are closing your FD account offline, you need to visit the same branch where you had opened the account. 
• Before closing your deposit account, you need to ensure that you have cleared all your debts and overdrafts taken against the FD. 
• You also need to verify all the deductions and fees for premature and partial withdrawal from your fixed deposit account if you are making an early withdrawal. It is always better to read between the lines and go through the terms and conditions of the fixed deposit account. 

Conclusion

A fixed deposit account is one of the safest investment options for attaining our financial goals. The interest rates are predetermined and do not fluctuate with the market performance. However, the funds are locked for a fixed tenure, and during an emergency, we may need to terminate the account to access funds. Closing a fixed deposit account prematurely invites unwanted charges, and the best practice is to keep the account intact until maturity and opt for other means to acquire urgent funds. You can close your fixed deposit account through online and offline mode as per your requirements. You can also take the help of our financial experts if you have any queries regarding closing your FD account in the UAE.