Fixed Deposit (FD) Closure Letter
Closes a fixed deposit at or before maturity.
Details
fd closure letterUploads
Your logo
A photo or picture
Goes on this page only. Drag it anywhere and pull its corner to resize it.
Your signature
Draw it with a finger, a mouse or a trackpad, and it goes on the page like a picture.
Pictures and signatures stay on this device. Nothing is uploaded to a server.
Red highlights mark what is still blank. Click anything on the page to change it. Your draft is kept on this device as you work.
Dear Sir / Madam,
I hold fixed deposit no. [FD number] for $ [amount] with your branch, linked to account no. [account no.] with your branch.
I request you to close the deposit [when] and credit the proceeds to my savings account.
The original deposit receipt is enclosed, duly discharged. Please advise the applicable interest and any penalty for premature closure before processing, if it applies.
What is a Fixed Deposit (FD) Closure Letter?
A fixed deposit closure letter instructs your bank to close a term deposit and pay the proceeds into a named account. It is needed because a deposit does not simply stop: many are set to renew automatically for a fresh term at maturity, and before maturity no bank releases funds on a phone call. The letter is the written instruction that either cancels the renewal or triggers a premature withdrawal, and it names the account the money must land in.
Savers closing a deposit to fund a property payment, school fees or a medical bill use this letter, as do people consolidating several small deposits into one, businesses releasing a margin deposit once a guarantee has expired, and anyone moving money to a bank offering better terms. Joint holders use it too, and the mandate on the deposit — either or survivor, former or survivor, both to sign — decides who has to put their name on the letter. It is submitted at the branch holding the deposit.
Terms vary by product and by country. Premature withdrawal normally attracts a penalty and a recalculation at the rate that applied for the period the money actually stayed, both set out in the deposit contract. Tax treatment differs: India deducts tax at source on interest above a threshold, while other countries report interest and tax it through your return. Some deposits cannot be broken at all — tax-saving deposits in India and certain fixed-term or notice accounts elsewhere. Read the deposit advice before writing.
The letter does not waive the penalty, and asking politely will not change a contractual rate reduction. It is not an application for a loan or overdraft against the deposit, which many banks offer at a lower cost than breaking it and which is a different form. It does not change nomination, and it cannot release a deposit that has been pledged as security for a loan, a guarantee or a court matter until the department holding that lien confirms in writing that the charge is lifted.
What to put in a Fixed Deposit (FD) Closure Letter
These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.
| Field | What goes in it |
|---|---|
| Issuing organisation | For example: Maple Grove Homeowners Association |
| Branch | For example: Dublin Branch |
| Organisation address | For example: 1420 Kinnear Road, Columbus, OH 43212 |
| Account no. | For example: 30412876591 |
| Fixed deposit no. | For example: FD-3041287 |
| Deposit amount | For example: 25,000 |
| Close it | Free text |
| Issued to (full name) | For example: James Whitfield |
| Their address | For example: 588 Kinnear Road, Columbus, OH 43212 |
How to write a Fixed Deposit (FD) Closure Letter
Quote the deposit number and maturity date
Give the fixed deposit receipt or account number, the principal amount, the date it was made, the maturity date and the branch. If you hold several deposits and are closing one, this is the line that prevents the wrong one being broken. Where you hold a physical deposit receipt, say that you are enclosing or surrendering it, and note if it has been lost so the bank can start its indemnity process.
Say close now or close at maturity
Write one of two things explicitly: close the deposit immediately and pay the proceeds net of applicable penalty, or do not renew it at maturity and credit the proceeds on the maturity date. A letter that says only please close my FD forces the branch to choose, and the choice they make may cost you interest. If you are cancelling an auto-renewal, send it well before the maturity date, not on it.
Name the credit account in full
State the account number, name and branch the proceeds should go to, and confirm it is in the same name as the deposit. Banks will not credit a third party on a letter. If you want a demand draft or banker's cheque instead, say so and name the payee. Leaving this blank produces the two worst outcomes: money parked in a dormant account, or an instrument you have to collect in person.
Acknowledge the penalty terms in writing
For a premature closure, add a line confirming you understand that interest will be recalculated at the rate applicable for the period held and that a penalty may be deducted under the terms of the deposit. Branches often need this to process without a further approval, and it removes the later argument about whether you were told. Ask them to confirm the net amount before they execute if the figure matters to your plans.
Surrender the receipt and get an acknowledgement
Hand in the original deposit receipt if one was issued, and have the counter stamp your copy of the letter with the date. Where the deposit is jointly held, make sure the signatures match the mandate exactly. Keep the stamped copy and the closure advice the bank issues, because it is the document you use if the deposit shows as open on a later statement or in an interest certificate.
Common mistakes
- Writing please close my FD without saying whether you mean now or at maturity, so the branch decides for you and you lose interest you would have earned.
- Missing the maturity instruction deadline on an auto-renewing deposit, which locks the money into a fresh term with a fresh penalty for breaking it.
- Sending a letter signed by one holder when the deposit mandate requires both, so it sits unprocessed while the maturity date passes.
- Forgetting that the deposit is under lien against an overdraft or a bank guarantee, then discovering at the counter that nothing can move until the lien is released.
- Leaving out the account to be credited, so the proceeds land in a dormant account or become a banker's cheque you have to collect in person.
Frequently asked questions
How do I write a letter to close a fixed deposit?
Address the branch manager, quote the deposit number, principal, start date and maturity date, state clearly whether you want it closed immediately or simply not renewed at maturity, name the account the proceeds should be credited to, acknowledge any premature withdrawal penalty if it applies, and sign in line with the deposit mandate. Enclose the original deposit receipt and get your copy stamped.
Can I break a fixed deposit before maturity?
Most ordinary term deposits can be broken, with interest recalculated at the rate applicable for the period actually held and a penalty deducted under the deposit terms. Some cannot: tax-saving deposits in India carry a statutory lock-in, and certain fixed-term or notice products elsewhere run to term. The deposit advice or the bank's terms page states which yours is, so check there before you plan around the money.
What happens if I do nothing when my FD matures?
That depends on the instruction recorded when the deposit was opened. Many are set to renew automatically for the same term at the prevailing rate, which restarts the clock and the penalty rules. Others are set to credit to a linked account and simply pay out. Look at the deposit advice for the maturity instruction, and if it says renew and you do not want that, send your letter in good time.
Do both joint holders have to sign the closure letter?
It depends on the mandate on the deposit rather than on the fact that it is joint. Either or survivor deposits can usually be closed on one signature, former or survivor deposits on the first holder's, and both to sign deposits need everyone. The mandate is printed on the deposit advice or recorded in the account details — confirm it before you make the trip to the branch.
Do I still get interest if I close early?
You get interest, but generally not the rate you were quoted. Banks normally recalculate at the rate that applied for the tenure the money actually stayed, and then deduct a penalty specified in the deposit terms. The net figure can be noticeably lower than the accrued amount shown in your app, so ask the branch to confirm the net payable before they process the closure.
This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.