Recently, there have become more frequent cases when a person who has come to the bank for his deposit is surprised to hear from the employees of the institution that the deposit has been automatically prolonged with his finances. What is it this and whether it is possible to refuse the procedure, you will find out by reading this article.
What is meant by prolongation of the deposit and where are its conditions prescribed
This is nothing more than an extension of the expired deposit agreement. As a rule, it is carried out on the same conditions on which the deposit was opened. Those who are interested in what is the extension of the contribution, it does not hurt to know that it can be automatic and non-automatic. In the first case, the client saves time on a visit to the bank, but at the same time he risks a lot, because sometimes banks arbitrarily change the terms of a new agreement. Therefore, do not blindly rely on the consciousness of the staff, but rather go and renegotiate the agreement. In the second case, the client must appear in person at the bank a few days before the expiration date of the deposit agreement and sign an additional agreement to the old agreement or renew the new one.
As a rule, the terms of prolongation of the deposit are prescribed by a separate clause of the main contract, upon execution of which the depositor is obliged to inform about the possibility of automatic re-signing. In addition, employees must first negotiate with the client the conditions under which renewal is possible.
Under what conditions is the contract renewed
Those who want to be calm about the safety of their deposit need not only to know what the extension of the deposit means, but also have at least an approximate idea of the conditions under which it is carried out.
First of all, you need to pay attention to the extension of the new contract. It should not exceed the one for which the original agreement was signed. Moreover, the new term begins on the day following the expiration date of the old deposit agreement.
The number of extensions may be unlimited or limited. In the first case, the deposit is reissued until the client decides to take the money. In the second case, the number of possible extensions is prescribed in a separate paragraph. Moreover, after the completion of the agreed number of prolongations, deposit funds are automatically transferred to the demand account. Employees of the bank, which does not practice the extension of the contract, are obliged to remind the client in advance of the approaching expiration of the deposit.
Is it possible to refuse to renew the contract
Many customers who are well aware of what is the extension of the deposit in the bank, they are interested in whether they have the right to refuse this service. According to the current legislation, the depositor has the right to interrupt the extension at any time. In order to do this, it is enough for him to simply come to the bank and write the appropriate application for termination of the deposit agreement. However, before deciding to take such a step, it is necessary to carefully consider everything. Indeed, if the deposit is closed before the day the contract expires, the interest will be accrued according to the scheme identical to that accrued on the demand deposit. In other words, the client will receive less than 1% per annum. If the deposit is closed on the day the next term expires, then interest will be received in full.
How are deposit conditions changed?
Those who are trying to figure out what is the extension of the contribution, it must be understood that the instability of the current market situation often forces banks to change the deposit rate. Despite the fact that this may not be beneficial to customers, the staff of the institution will not specifically notify investors about the amendments. As a last resort, they can send an email. But not the fact that the contributor will generally notice the message and read it. Therefore, those who have a deposit tied to the phone can be recommended to periodically be interested in the state of their account.
What will happen if the depositor fails to appear at the bank
Clients sorted out what is the extension of the contribution, must understand that under the terms of the contract, bank account management cannot be entrusted to anyone else. If, due to some life circumstances, the depositor cannot timely come to the bank to extend or terminate the contract, then he must write in advance a power of attorney to someone close to him. This can be done at the notary's office or directly at the bank.
What happens if the depositor does not take the money
Most modern people are well aware of what is the extension of the contribution. In Sberbank usually, automatic extension of fixed-term deposits is foreseen in the event of the entry into force of some unforeseen circumstances prescribed at the legislative level. But in reality, each specific case has to be considered separately. Among such insurmountable circumstances include:
- natural disasters and natural disasters;
- situations related to the life of society (military operations, epidemics, strikes, revolutions, etc.);
- prohibitions imposed by government bodies.
Is the bank obliged to issue a new agreement to the client upon automatic extension of the deposit
Sometimes life circumstances do not allow a person who has a good idea of what is the prolongation of a contribution to appear in time for his money. Often after this, branch managers refuse to give the client a new copy of the contract, citing the fact that such a service is not provided for an automatic extension of the deposit. How legitimate are these explanations and what will happen to the deposit if the bank suddenly goes bankrupt? Most lawyers reassure such clients, assuring them that there is no cause for concern. According to them, the old contract, which provides for the possibility of automatic prolongation, should specify not only the date of completion of the deposit, but also the day until which the original interest rate is valid.
Of course, there are times when a bank unilaterally changes the current rate. In order to avoid possible misunderstandings in this regard, experienced lawyers recommend that depositors must require the bank to provide them with a letter, certificate or any other documentation of an informational nature in which new data will be indicated.
In the event of bankruptcy of a financial institution, the presence of a deposit in it can be proved by presenting an agreement signed with the bank at the time of depositing funds. As a confirmation that the money actually came into the account, you can use a savings book or other document of the established form.