If you have extra funds and prefer to avoid high-risk investments, fixed deposits can be a great option. However, many banks require a high initial deposit, often starting from Rp10 million, and impose a long minimum tenure, usually around one year.

Despite these conditions, deposits remain attractive because they offer higher interest rates than regular savings accounts. As a customer, you may be looking for a savings product that provides profitability, competitive interest rates, zero administrative fees, flexible terms, and a low minimum deposit requirement.

So, how do fixed deposits work? Let’s dive into the details!

How Fixed Deposits Work

A fixed deposit works similarly to a regular savings account, but with a specific tenure that you choose when opening the deposit.

Once deposited, your funds cannot be withdrawn until the maturity date to ensure you receive the maximum interest.

However, if you withdraw the funds before the maturity date, you may face penalties or forfeit your interest earnings.

If you decide not to withdraw your deposit upon maturity, you can opt for a rollover, which extends the deposit’s tenure.

Read also: The Advantages of Deposits in neobank – From Competitive Interest to Flexibility

What is a Rollover?

A rollover is an automatic extension of your deposit’s maturity period. This feature is commonly known as Automatic Roll Over (ARO).

If your deposit reaches maturity but you choose not to withdraw the funds, it will be automatically extended with the same tenure as before. The interest will continue accumulating even after the initial deposit period ends.

For example, if you opened a 6-month fixed deposit in January, your funds should be available for withdrawal in July. However, if you select the rollover option, the deposit will be automatically extended for another 6 months. This cycle will continue until you manually withdraw the funds.

Benefits of Rollover Deposits

With our busy schedules, we often forget small tasks like monitoring deposit maturity dates. Automatic rollovers eliminate the hassle by ensuring your deposit continues without requiring manual renewal.

Therefore, before investing in a deposit, check whether the product offers an automatic rollover feature.

neobank Fixed Deposit Mechanism

How do you open a deposit in neobank, and what are the steps involved? Here’s everything you need to know:

1. Are there any fees for opening a deposit?

Opening a fixed deposit in neobank is completely free.

2. How is deposit interest calculated?

The interest calculation formula is:

Gross Interest = Principal x Interest Rate x (Tenure in Days / 365)

Tax on Interest = 20% x Gross Interest

Net Interest = Gross Interest - Tax on Interest

Since the number of days in each month varies, the deposit tenure is calculated based on the initial deposit date and the maturity date.

For example, if you open a Deposit on February 10, 2024, with Rp10,000,000 at 7% per annum, the tenure is 89 days (from February 10 to May 10).

Simulation:

Gross Interest:
IDR10,000,000 x 7% per annum x (89/365) = Rp170,685

Tax on Interest (20%):
20% x Rp170,685 = Rp34,137

Net Interest:
Rp170,685 - Rp34,137 = Rp136,548

3. How do I open a deposit in Neobank?

1. Open the Deposits section in th neobank 
2. Select the deposit product
3. Enter the deposit amount (minimum Rp200,000)
4. Choose the funding source and rollover option
5. Confirm and click "Open Deposit"
6. Review the deposit details
7. Enter your transaction PIN
8. Process completed

4. How does the neobank deposit rollover system work?

neobank’s WOW Deposit allows you to choose between two rollover options:

1. Principal Only (only the initial deposit amount is rolled over)
2. Principal + Interest (both the deposit amount and earned interest are rolled over)

You can stop the rollover at any time before the maturity date. Once the tenure ends or you disable the rollover, the principal and interest will be credited back to your bank account.

5. Can I open a deposit on public holidays? What happens if my deposit matures on a holiday?

Yes! You can open a fixed deposit anytime, even on public holidays.

If your deposit matures on a public holiday, the funds will be automatically credited to your Neobank account within 24 hours of the maturity date. Your funds remain safe and secure.

6. How do I withdraw my deposit after maturity? How long does it take to receive the funds?

If you don’t select the rollover option, your funds will be automatically transferred back to your savings account on the maturity date, within 24 hours.

Now that you understand how neobank’s rollover deposits work, why not open a deposit and enjoy its benefits?

Download neobank on PlayStore and App Store now! Open a WOW Deposit, or Flexi Deposit now!

For complete information and terms & conditions regarding neobank products, click the following links:

- WOW Time Deposit: https://bit.ly/EdWebDepositoWOW

- FLEXI Time Deposit: https://bit.ly/EdWebFLEXI

If you want to try neobank products, click the links below:

- WOW Time Deposit: https://bit.ly/DepositoWOWEdu

- FLEXI Time Deposit: https://bit.ly/EduDepositoFLEXI

***

PT Bank Neo Commerce Tbk is licensed and supervised by the Indonesia Financial Service Authority (OJK) and Bank Indonesia (BI), and an insured member of Deposit Insurance Corporation (LPS).