Bad news for those who have made FD!

Kokila Chokkanathan
Bad news for those who have made FD!

After the Reserve bank reduced the repo rate from 6.50 percent to 6.25 percent, the discussion about the reduction in the interest rate given by banks on FD has also intensified. In such a situation, the concern of people who have put a huge amount in fixed deposit 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 data-face the consequences. Investors should take special care that banks impose a penalty on premature withdrawal. In such a situation, they may have to data-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 can be waived

The penalty imposed on premature withdrawal can be waived only on the basis of certain conditions. Such as re-investing for long term FD again with the same bank. In such a situation, before taking any step, investors should know well about the fine structure of 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 give one percent less interest than the interest rate on FD on withdrawal before maturity.

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