What to do if bank deposits mature during the epidemic? How to calculate the interest on automatically extended deposits during the epidemic?

As we all know, due to the impact of the new coronavirus, many service industries in many places have closed down, and many related business agencies have also suspended services. So what should I do if my bank deposit expires during the epidemic? Let's take a closer look!

What to do when bank deposits mature during the epidemic

The five major state-owned banks stated that during the epidemic, time deposits can be automatically extended upon maturity and interest will be calculated at the original interest rate until March 31.

The five major state-owned banks, including Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank and Postal Savings Bank of China, have all issued announcements stating that they will automatically extend the maturity period for personal time deposits in RMB and foreign currencies held by users. The banks will calculate interest at the original interest rate until March 31, 2020. After the epidemic stabilizes, users can go to the branches to handle withdrawals and subsequent business.

How to calculate the interest on bank deposits deferred during the epidemic

Some banks have introduced policies to postpone the period until March 31, and the interest for the extension will be based on the original interest rate; some banks have also introduced convenient measures for automatic renewal of deposits upon maturity, with deposits transferred according to the original term, but the renewal interest rate will be based on the current product interest rate.

Commercial banks, including state-owned banks, joint-stock banks and city commercial banks, generally limit the maturity date of deposit products that can enjoy the extension policy to the period from January 24 (inclusive) to March 31 (inclusive). The types of deposits are generally limited to paper certificates of deposit or passbooks.

For these extended deposits, if the original term has expired but the extended term has not yet arrived, does withdrawing the money at this time count as early withdrawal? If it is considered early withdrawal, the interest loss will be huge. However, this situation should not happen, because the depositor withdraws the money after the maturity of the deposit according to the deposit contract. The extension period given by the bank can only be regarded as a benefit given by the bank to the depositor. The depositor can choose to take or not take the deposit, rather than a hard requirement stipulated in the contract.

What happens if you don't withdraw or renew your deposit after it expires?

In fact, whether it is a time deposit or a large-denomination certificate of deposit, it doesn’t matter if you don’t go to the bank to withdraw it after maturity, the money will still be in the bank account. However, if you don’t withdraw or renew the bank deposit after maturity, you may suffer a certain loss in interest. There are several situations:

1. Automatic transfer of fixed deposit

If you deposit money in a fixed term deposit and you have set up an automatic rollover when you deposited the money, it doesn't matter if you don't withdraw it. The bank will automatically renew the deposit for another term, and the interest will generally be calculated based on the original rate. Of course, if you plan to withdraw the money for other financial management, it will still have a certain impact. Because after the deposit is automatically renewed, you can only get all the interest if you deposit it for a full term. If you withdraw it in advance, the interest during the renewal period will only be calculated based on the current account interest.

2. The fixed deposit is not automatically transferred

If this is the case, if you do not withdraw the deposit or go to the bank to renew it when it matures, the bank will normally transfer the money to the current account. Since the interest rate of a time deposit is several to dozens of times higher than the interest rate of a current deposit, there will inevitably be a certain amount of interest loss at this time.

3. Large-denomination certificates of deposit

There is no automatic transfer service for large-denomination certificates of deposit, so if you do not withdraw or renew them after maturity, they will be directly transferred to your current account. Since the interest rate of large-denomination certificates of deposit is usually higher than that of time deposits, if you do not withdraw them after maturity, the loss of interest will be greater.

In addition, other deposits that are not automatically transferred will basically be transferred to a current account if they are not withdrawn or renewed after maturity.

Can I withdraw my bank deposit on the day it matures?

Fixed deposits can be withdrawn on the day of maturity. Fixed deposits can be withdrawn as soon as they mature, and there is no need to wait until the maturity date to withdraw them.

On the due date, customers can choose to go to a bank branch with their ID card and deposit certificate to withdraw the money, or they can choose to withdraw the money directly through online banking or mobile banking.

However, if you withdraw money after the due date, the interest on the funds after the due date will be calculated based on the current account interest rate. Of course, fixed deposits can also be withdrawn in advance, but if you withdraw in advance, the interest on the withdrawn funds will also be calculated based on the current account interest rate.

In addition, if you do not plan to withdraw, you can also transfer the deposit. In fact, as long as the customer submits an application to the staff for automatic transfer upon maturity when making a deposit, the bank will automatically transfer the deposit principal and interest to the second deposit period after the customer's fixed deposit expires. Moreover, there is no limit on the number of transfers, and the interest during the renewal period will be calculated according to the interest rate on the previous maturity date.