New Delhi: Ever since the Reserve Bank of India (RBI) started hiking the repo rate in May 2022, various banks in India have started increasing the interest rates on fixed deposits on a regular basis. Fixed deposits are always attractive investment options for conservative investors because of the assured returns. However, one should understand the premature withdrawal rules on fixed deposits.
What is Premature Withdrawal?
All banks provide (unless stated otherwise) an option to prematurely close and withdraw money from a fixed deposit account before the maturity period. However, that provision comes with charges — a penalty ranging from 0.5 per cent to 3 per cent depending on the bank.
For instance, the State Bank of India (SBI) charges a penalty of 0.50 per cent on premature withdrawal of FDs up to Rs 5 lakh. However, if the investment exceeds Rs 5 lakh, the bank charges you a penalty of 1 per cent. HDFC Bank charges a penalty of 1 per cent in case of premature closure of the FD account.
Read More: Gold Prices Decline In India On May 25; Check 22 Carat Gold Rate In Your City
Punjab National Bank Sugam Term Deposit scheme
In general term deposits, the Punjab National Bank (PNB) levies an interest penalty of 1 per cent at the time of premature cancellation or part withdrawal of FDs for all tenors.
But in the case of the Sugam Term Deposits scheme, the bank does not levy any premature withdrawal penalty.
How To Prematurely Withdraw Punjab National Bank Sugam Term Deposits?
In case of PNB Sugam FD scheme, the depositor has the freedom to withdraw any amount before maturity in multiples of Re 1 subject to a minimum withdrawal of Rs 1000 at a time, whenever he/she needs it without breaking the entire deposit and without losing interest on the remaining deposit under the scheme.
Read More: Can you deposit or exchange Rs 2,000 notes at post offices?
“The value of the Term Deposit Receipt (Principal amount) shall be reduced accordingly. No penalty is to be levied in respect of the part withdrawal of the deposit. If any depositor desires to withdraw the entire deposit before maturity, no penalty will be levied and the interest rate payable would be the contractual rate or the rate under the scheme on the contractual date applicable for the tenor for which the deposit has run, whichever is lower,” PNB stated on its website.
What Are The Interest Rates On PNB Sugar Term Deposit Scheme
| enure | Interest Rate |
| 46 days to 90 days | 4.50% |
| 91 days to 179 days | 4.50% |
| 180 days to 270 days | 5.50% |
| 271 days to less than a year | 5.80% |
| 1 year | 6.80% |
| above 1 year to 665 days | 6.80% |
| 666 days | 7.25% |
| 667 days to 2 years | 6.80% |
| Above 2 years and up to 3 years | 7.00% |
| Above 3 years and up to 5 years | 6.50% |
| Above 5 years and up to 10 years | 6.50% |
*Source: Bankbazaar
