Bank fixed deposits attract a penalty, if you break the deposits early. Some banks do not charge a penalty, if you break the deposits after one year, while some others do.
Normally, banks charge a penal interest rate of 1 per cent. So, you would get interest for the period that you have placed the deposit, less one per cent.
However, there are banks that do not charge a penalty on breaking fixed deposits. Here are a few banks:
IDBI Bank Freedom Deposits
IDBI Bank does not charge a penalty on its Freedom Deposits. So, you may save that one per cent, in case you wish to break the deposit early. You can choose deposits at IDBI Bank from tenure ranging from 15 days to 20 years for minimum deposits starting from Rs. 10,000. The deposit rates of IDBI Bank are in line with most other banking peers and they offer virtually the same benefits and flexibility as others.
Yes Bank Fixed Deposits
Yes Bank Fixed Deposits, like IDBI Bank deposits, do not come with any penalty on breaking the fixed deposits. So, you might end-up saving 1 per cent, in case there is a tendency to be indisciplined, when it comes to this aspect.
Yes Bank deposits offer a maximum interest rate of 7.95 per cent.
Clearly, if you are looking to invest in deposits of banks, make sure you are going to stick to the tenure you have opted. Otherwise you could end-up losing money.