Sometimes, due to urgent reasons or unexpected emergencies, a depositor may need to withdraw their fixed deposit (FD) before its maturity.
The bank allows customers or depositors to withdraw their fixed deposits prematurely; however, a penalty is charged for this, which is deducted from the deposited amount.
If you plan to withdraw your fixed deposit (FD) from the bank before its maturity, it’s important to understand the penalty charges imposed by the bank for premature withdrawal.
What is the penalty for withdrawing a fixed deposit before maturity?
The penalty for premature withdrawal of an FD is determined by the bank based on its maturity period.
This charge is applied to the final interest payment or the refunded amount.
Below, you can find details about the penalty charges for pre-mature FD withdrawals at SBI, HDFC Bank, ICICI Bank, PNB, Canara Bank, Bank of India, and Yes Bank.
Penalty Charges for Premature FD Withdrawal at SBI
As per SBI’s website, if your term deposit is up to five lakhs, a penalty of up to 0.50 percent will be applied for premature withdrawal.
For deposits exceeding five lakh rupees, the penalty charge will be up to 1 percent.
HDFC Bank Penalty for Premature FD Withdrawal
As per the information on HDFC Bank’s website, starting from July 22, 2023, the interest rate for premature withdrawal of funds, including partial withdrawals, will be reduced by 1 percent from the rate applicable if the deposit had remained with the bank for the full term.
PNB Bank Penalty for Premature FD Withdrawal
As per the information on PNB Bank’s website, the bank imposes a penalty of up to 1 percent for premature FD withdrawals. This penalty applies to all types of deposits.
ICICI Bank Penalty for Premature FD Withdrawal
The bank will pay interest on the fixed deposit amount as long as it remains with the bank for the agreed-upon time period.
If the FD is withdrawn before maturity, the bank imposes a penalty. ICICI Bank charges a penalty of up to 0.50 percent for withdrawals made within one year of deposit.
On the other hand, the bank imposes a penalty of 1 percent for FD withdrawals made after one year.
Canara Bank Penalty for Premature FD Withdrawal
As per Canara Bank’s website, the bank imposes a penalty of up to 1 percent for the premature closure, partial withdrawal, or premature extension of domestic/NRO term deposits under Rs 3 crore, which were accepted or renewed after March 12, 2019.
However, the penalty for premature extension may be waived under specific conditions.
YES Bank Penalty for Premature FD Withdrawal
The bank imposes a penalty of up to 0.75 percent for closing the FD before 181 days. If the FD is closed on or after 182 days, the penalty increases to up to 1 percent.
Bank of India Penalty for Premature FD Withdrawal
Bank of India does not impose any penalty for withdrawing a deposit of less than Rs 5 lakh or after 12 months.
However, if the deposit is withdrawn before 12 months and is under Rs 5 lakh, the bank charges a penalty of 1 percent.
Penalty does not apply on premature withdrawal in the following situations:
As per the information available on the Bank of India website, there is no penalty for prematurely closing a deposit if it is being renewed for a period longer than the remaining duration of the original contract, regardless of the deposit amount.
Additionally, if the term deposit is withdrawn early due to the death of the depositor, no penalty will be charged.
