New Delhi: Banks usually allow customers to close their fixed deposits before the scheduled maturity date. However, if you decide to do this before the full tenure, you might not receive the entire interest on your investment and could face a penalty. Essentially, the interest will only be paid for the duration your deposit was with the bank. After you close the FD, the money will be transferred to your account as usual.
An FD can either be sustained until its maturity or can be redeemed or surrendered before reaching the end of its initially specified tenure, which is referred to as premature withdrawal.
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About Fixed Deposit (FDs):
Bank fixed deposits (FDs) have consistently remained a popular investment option, particularly for conservative investors seeking to safeguard their capital.
In a Fixed Deposit, you put a lump sum in your bank for a fixed tenure at an agreed rate of interest. At the end of the tenure, you receive the amount you have invested plus compound interest. FDs are also called term deposits.
Penalty Charges For Premature Withdrawal of FD:
As per information from www.bankbazaar.com, the majority of banks impose a fee for the premature withdrawal of fixed deposits. Typically, this fee ranges from 0.5% to 1.00% of the interest rate.
Nevertheless, certain banks refrain from imposing any penalties in cases of emergencies or if the depositor intends to reinvest the same amount in an alternative investment option offered by the bank.
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How To Close A Fixed Deposit Account Before Maturity: Online
Step 1: Visit your lender’s website.
Step 2: Now log in using your user ID and password.
Step 3: Then go to the service request section.
Step 4: Navigate for the ‘Premature Closure of Fixed Deposits’ option.
Step 5: Finally, enter the FD number and click on submit.
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FAQs
What happens to fixed deposits after maturity?
Ans. When your FD matures, you can easily liquidate or withdraw the deposit by visiting the branch or online.
What is a premature withdrawal of a fixed deposit?
Ans. Withdrawing money from a fixed deposit before the date of maturity is called premature withdrawal.
Can I withdraw money from a fixed deposit before maturity?
Ans. Yes. However, you will be charged a penalty for such premature withdrawals.
What happens to FD when an account is closed?
Ans. Upon successful closure of the fixed deposit account, all the maturity proceeds with the original investment will be transferred into your account.
