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Personal circumstances or unexpected emergencies may require an investor to prematurely redeem or withdraw a fixed-term investment. Banks allow customers to make premature withdrawal of fixed deposits (FD), but usually with a penalty. If you think that you may have to withdraw your FD before the maturity date, you should be aware of the premature withdrawal penalty.
What is premature withdrawal of fixed deposits? Premature withdrawal of a fixed deposit refers to the withdrawal of the investment prior to its maturity date. Mostly a penalty is levied for premature or early withdrawal. The penalty is deducted from the final interest payment or redemption/refund amount.
Fresh KYC for PM Jan Dhan accounts completing 10 years: How to update KYC details in PMJDY accounts with SBI, PNB, ICICI Bank, Canara Bank Here is a look at the penalty charges of SBI , HDFC Bank , ICICI Bank , PNB , Canara Bank , Bank of India and Yes Bank for premature withdrawal of FD. (Information as per banks’ websites as on November 20, 2024) SBI penalty on FD premature withdrawal According to the SBI website, "For term deposits up to Rs 5 lakh, the penalty for premature withdrawal will be 0.50% (all tenors).
For term deposits above Rs 5 lakh, the applicable penalty will be 1% (all tenors). The interest shall be 0.50% or 1% below the rate applicable at the time of deposit for the period deposit remained with the Bank or 0.
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Anu Khanchandani, Startup Coach with more than 25 years of experience View Program Web Development C++ Fundamentals for Absolute Beginners By - Metla Sudha Sekhar, IT Specialist and Developer View Program However, no interest will be paid on deposits which remain with the bank for a period of less than 7 days. HDFC Bank penalty on FD premature withdrawal According to the HDFC Bank website, “With effect from July 22nd, 2023, the interest rate applicable for premature withdrawal including Sweep-in/Partial Withdrawal will be 1% less (penalty as applicable) of the rate on the date of deposit booked to the period for which deposit remained with the bank and not at the contracted rate.” PNB penalty on FD premature withdrawal According to the PNB website, “1% penal interest shall be charged at the time of premature cancellation/part withdrawal of domestic term deposits for all tenors and interest rate payable would be contractual rate minus 1% or the rate under the scheme on the contractual date applicable for the tenor for which the deposit has actually run minus 1%, whichever is lower.
” ICICI Bank penalty on FD premature withdrawal According to the ICICI Bank website, “Note that interest on deposit shall be paid for the period that it has remained with the bank at the rate that prevailed for deposits at the time of booking the deposit and not at the contracted rate and after deduction of applicable penalty.” ICICI Bank charges 0.50% for FDs withdrawn before 1 year and 1% as penalty for those withdrawn after 1 year tenure.
Canara Bank penalty on FD premature withdrawal According to the Canara Bank website, “A penalty of 1.00% shall be levied for premature closure/part withdrawal/ premature extension of Domestic/NRO term deposits of less than Rs.3 crore that are accepted /renewed on or after 12.
03.2019.” Penalty is waived for premature extension of Domestic / NRO term deposits under specific conditions.
Yes Bank penalty on FD premature withdrawal A 0.75% penalty on the applicable interest rate will be imposed if the FD is closed in less than 181 days. If you close after 182 days or more, the penalty is 1%.
Bank of India penalty on FD premature withdrawal There is no charge for deposits less than Rs 5 lakh withdrawn on or after completion of 12 months. For deposits less than Rs. 5 lakh withdrawn prematurely before completion of 12 months the penal charge is 0.
50%. For deposits of Rs 5 lakh and above withdrawn prematurely the penalty is 1.00%.
When premature withdrawal penalty is not applicable? According to the Bank of India website, “In case of the deposits which have been prematurely closed for renewal for a longer period than the remaining period of the original contract tenure, there shall be “No penalty” for the premature withdrawal irrespective of the amount of the deposit. No Penalty for the premature withdrawal of Term deposits due to death of depositor/s.”.
