Deposit programs in banks are characterized not only by interest rates, but also by a number of other conditions, such as the possibility of deposit replenishment, withdrawal and extension. In this article, we will consider what the extension of deposits is, its advantages and disadvantages, what nuances you need to know so that the extension of the deposit is beneficial for you.
What is the extension of the deposit
Prolongation is the extension of the term of validity of the agreement between the parties after the end of its term of validity, that is, in the case of deposits, the extension of the validity of the deposit agreement between the depositor and the bank for the next term. If for ordinary contracts it is often necessary to sign a corresponding additional agreement, then for deposits auto-extension of the deposit is mainly used - this is an automatic extension of the term of validity of the deposit agreement without any additional documents and the presence of the parties in the event that none of the parties notified of its refusal continuation.
Deposits in the bank can be both with automatic extension and without this possibility. If there is a prolongation, the number of such prolongations can be different in different banks and for different deposits - it can be either a one-time prolongation of the deposit or more than 10 times.
Where to find the terms of automatic extension of the deposit
The possibility of extending the deposit must be indicated on the bank's website in the description of the given deposit and in the file with its essential characteristics.
The extension of the deposit is prescribed in the Application-agreement for placing the deposit, which is signed by you and the bank. When placing a deposit, it is important to check the availability of this option and discuss its conditions. The statement-agreement records all the obligations of each of the parties to the agreement and, accordingly, each of the parties, that is, both the bank and the depositor, must fulfill these conditions.
Under what conditions is the extension of the deposit
If you make a deposit with automatic renewal, find out the following conditions:
- Interest rate for extension
- How many times the extension is possible
- Procedure for refusal of extension
Deposit extension conditions vary from bank to bank, but usually, in most financial institutions, automatic deposit extension is carried out while maintaining all the conditions of the originally placed deposit - the same deposit program, the same currency of the deposit, the same term, the same amount of the deposit that you placed. In the case of placement of share deposits, another deposit product may be specified, under the terms of which this share deposit will be extended.
The only thing that can change is the interest rate. In the absolute majority of banks, the extension of deposits takes place at the interest rate that is effective in the bank for this deposit program on the day of the extension. However, there may be cases when a rate different from the current rate is set during the extension of deposits.
The current terms of extending deposits are detailed on the bank's website in a public offer for private clients, a link to which must be placed on the deposit page on the bank's website. Be sure to familiarize yourself with the rules and conditions of placing and prolonging the deposit before making the deposit, in order to clarify all points and protect yourself from unpleasant surprises.
Automatic extension of the deposit: pros and cons
Pluses. The main advantage that the automatic extension of the deposit gives you is the absence of the need to waste time every time to visit the bank branch again to place the deposit again, because the deposit is extended automatically without your presence. Also, banks often have a loyalty program, according to which you get a higher interest rate if you extend the deposit - another additional benefit for you.
Cons. The only drawback of extending the deposit is the need to control this option on your part. Let's look at examples of situations that can happen due to a non-serious attitude to the extension of the deposit.
If you want to withdraw your funds at the end of the term of the deposit, but did not notice that your deposit involves automatic extension or did not apply in time to cancel the extension, your deposit will be extended for the next term and you will not be able to withdraw your funds during this time.
Or, on the contrary, you did not notice that there is no extension for your deposit, or you forgot that you refused it, and you think that the deposit was successfully auto-extended. However, when you contact the bank at the end of the expected extension, you find that your funds were simply lying in the current account all this time and no interest was accrued on them. If it was UAH 100,000 for a term of 1 year at 20%, then due to your imprudence, you could lose UAH 16,000.
How to refuse automatic extension of the deposit
Just as the conditions under which the deposit is extended differ in different banks, so the procedure for refusing the extension depends on each specific bank. Therefore, always clarify the bank's requirements and do not rely on your previous experience. In general, you need to understand two key things:
- When it is possible to refuse the extension. In some banks, it is possible to do this at the time of making the deposit, and in some - only the next day or even only a month before the end of the deposit period. The same with the last day when it can be done. In most banks, the extension of deposits is possible only until the day of completion of the deposit, and in some banks even no later than 7-10 days before this date. But there are banks in which you can cancel the extension even within a few days after the end of the term of the deposit and after its extension. If so, you need to watch this date so as not to miss the right moment.
- What is the procedure for refusing an extension. This can mainly be done in two ways - either in online banking in a couple of clicks, or by submitting an application in a branch. This is one of the reasons to install the online banking of the bank where you have a deposit. In it, you can control the end date of the deposit and change the extension.
Extension of deposit in Agroprosperis Bank
Deposits in Agroprosperis Bank provide for the possibility of auto-extension for certain deposits, which is indicated on the page of each deposit in the conditions, the file with essential characteristics and the warning about using the service.
It is possible to refuse the prolongation of the deposit immediately at the time of its registration and during the entire period until the day preceding the date of completion of the deposit. It is also possible to return the extension all the time until the end of the term.
To change the extension conditions in AP Bank online banking, go to the Deposits section, click on the desired deposit, then click on the icon in the upper right corner. In the window that opens, you can see the end date of your deposit and change the terms of automatic extension of the deposit by setting the slider to the desired position.
You can write a written application for the extension of the deposit directly in the branch or send it in scanned form through the feedback form to email@example.com. This statement must contain your full name, TIN, number and date of the bank deposit agreement and your signature.
The extension of the deposit is as important a condition of the deposit as the interest rate, and it also needs your attention and control. Therefore, when signing a deposit agreement, always clarify the conditions under which this deposit is extended and the conditions for canceling the extension. The easiest way to keep your finger on the pulse is to register in Internet banking so that you can always see the term of your deposit and be able to cancel or return the extension.