Premature FD Withdrawal: Many people want to withdraw money from their premature FD and invest it in financial tools with better returns. Those who do this in a hurry may have to face consequences.
Premature FD Withdrawal: After the Reserve Bank reduced the repo rate from 6.50 percent to 6.25 percent, the discussion of reduction in the interest rate given by banks on FD has also intensified. In such a situation, the concern of people who have invested a huge amount in fixed deposits has increased. Many people want to withdraw money from their premature FD and invest it in financial tools with better returns.
Those who do this in a hurry without thinking deeply may have to face consequences. Investors should take special care that banks impose a penalty on premature withdrawal. In such a situation, they may have to face losses. Let us tell you that the penalty imposed on premature withdrawal can be waived only on the basis of certain conditions.
Penalty on premature withdrawal may be waived
The penalty on premature withdrawal can be waived only on the basis of certain conditions. Such as re-investing again with the same bank for long term FD. In such a situation, before taking any step, investors should know well about the fine structure with their bank and the interest received on premature withdrawal. Let us tell you that all banks impose different penalties on premature withdrawal of FD. However, this penalty usually ranges between 0.5 percent to one percent.
State Bank imposes half percent penalty
State Bank of India imposes a penalty of half percent on premature withdrawal of term deposits up to Rs 5 lakh, while there is a penalty of one percent on term deposits of more than Rs 5 lakh. At the same time, Punjab National Bank will give 0.5 or one percent less interest than the interest rate on FD on withdrawal before maturity. HDFC Bank will pay one percent less interest than the interest rate on FD on withdrawal before maturity.
