No Penalty On Premature Withdrawal Upto Rs 1 Crore

New RBI Circular

The RBI released a circular on 26th October 2023 stating that all FDs made upto Rs 1 crore can be prematurely withdrawn without paying any penalty.

For Whom is the Circular Applicable?

This benefit will be available for all deposits made by resident Indians and NRE/NRO term deposits.

What was the Situation Before the Circular?

Before the release of this circular, all FDs upto ₹15 lac were callable, meaning the no penalty withdrawal limit was upto ₹15 lac.

What are Callable FDs?

A callable fixed deposit is where the FD amount can be withdrawn wholly or partially before maturity. All FDs that allow premature withdrawal are called callable FDs. 

What are Non-callable FDs?

A non-callable fixed deposit is a scheme where you cannot withdraw the invested amount before maturity.

Callable FD vs Non-Callable FD

What Does this Rule Mean for You?

This rule allows premature withdrawal FDs up to ₹ 1 crore without paying any penalty. You can now close your FDs prematurely & reinvest when the interest rates increase.