FD Premature Withdrawal Penalty Calculator

Fixed deposits offering a premature withdrawal option let you close your account before the term ends. This can be helpful when you are in need of liquidity.
But you need to pay the penalty to the bank for withdrawing the money early. The penalty usually ranges between 0.5 and 1%. However, some banks don't charge a penalty for premature withdrawals.
If you withdraw your money within seven days of opening the account, the bank or company won't pay you any interest.

It is essential to be aware of the penalty charges associated with the premature withdrawal of fixed deposits. This can help you plan your finances better and avoid any unnecessary expenses.

Let's say you put ₹10 lakhs in a fixed deposit for three years at 7.5% per year. However, after a year, you need to withdraw your money. When you initially invested, the interest rate for a one-year term was 7% per year. You have already earned interest at 7.5% for the first year, but if you withdraw early, the bank will recalculate the interest rate based on 7% minus 1%, which is 6% per year. This means you will receive a lower interest payout. Remember that only the interest earned will be subject to a penalty, and your principal amount will remain the same.

The above is the most generally used technique for calculating the penalty for bank fixed deposits.

You have two options for withdrawing your Fixed Deposit before the maturity date: offline or online.

To make an offline withdrawal, go to your bank branch and fill out a form for closing your FD account early. You must also complete the required  paperwork and hand over your Fixed Deposit Receipt.

If you prefer a digital option, keep in mind that certain banks only offer online withdrawals for deposits made online. To utilise the online option for premature withdrawal of fixed deposits, check that net banking is enabled.

1. Login to your lender's official website.
2. Navigate to the website's service request page.
3. Then click on "Premature Closure of Fixed Deposits."
4. Enter the necessary information, such as your FD number, and submit a request to cancel the fixed deposit.

1. Fill out the premature FD withdrawal form and return it to the branch. Check that all of the necessary information, such as the FD number, name, and bank account information, is correctly provided.
2. Submit the premature FD withdrawal form together with documents such as an Aadhaar card and PAN card, among other things.
3. Next, your request will be processed by the bank and your funds will be sent to your account when the FD is closed, either online or offline via a cheque.

Fixed deposits are a popular investment option in India due to their low-risk profile and guaranteed returns. However, there may be situations where you need to withdraw the FD prematurely. Therefore, it is essential to understand the rules, procedures, and penalties associated with the same. Different banks have different criteria and penalty charges for premature withdrawal. Penalty charges can reduce the interest rate earned on the deposit and sometimes even nullify the interest entirely. This guide provides a comprehensive understanding of breaking an FD in India, covering rules, penalties, and procedures for breaking an FD. Hence, it is essential to understand the penalty charges and the calculation method used to avoid unnecessary expenses. Overall, this guide equips you with all the information you need to make an informed decision while you break an FD.