How Much Charges Are Applicable If You Break Your Fixed Deposits Before Maturity

Fixed Deposits are one of the most popular and safest investment options for an investor. However, it is more popular among senior citizens. Many young investors also prefer fixed deposits instead of riskier trade.

There are many pros to the FDs, but it also has one exception: withdrawing money becomes difficult for investors in times of urgency. Premature deposit withdrawal is a way to withdraw Fixed Deposit, but you are charged in some way for using it.

How much is charged when withdrawing Prematurely?

The investor is charged in some way to withdraw the Fixed Deposit prematurely. In most premature withdrawal cases, the investor is charged between 0.50% to 1% of interest by most banks. Some banks also don't charge for withdrawing premature fixed deposits, but they should meet specific terms, conditions or charges if one wants to withdraw premature FDs.

How to withdraw Fixed Deposit Prematurely?

There are two ways you can withdraw your Fixed Deposit Prematurely. One is online, and the other is a traditional offline way. The offline way involves physically visiting your bank branch, filling out forms and giving back the fixed deposit receipts after some formalities. To use the online way, you should have enabled internet banking in the first place. Even then, many banks have one condition: if the FD is booked online, only you can withdraw online.

Disadvantages of Premature withdrawal of Fixed Deposit

• Interest Loss - When you withdraw your Fixed Deposit prematurely, you are no longer eligible for the same interest you were getting; you have started again with low-interest rates if you want to invest in Fixed Deposits.

• Charged Penalties - You will be charged penalties at the time of withdrawal. The withdrawal charge is about 0.50% to 1% for most of the banks in the country.

• Other disadvantages - There are many other disadvantages, like premature withdrawals are a Cumbersome process, and you will not be getting returns on your money.