Fixed Deposit schemes offer individuals the flexibility to withdraw their money or go for premature closure of their accounts at any time. However, banks also levy a penalty for premature closure and withdrawals. Here is a look at the fixed deposit premature withdrawal/closure rules of State Bank of India, HDFC Bank, Punjab National Bank, and Axis Bank:
SBI Fixed Deposit Premature Withdrawal/Closure Rule
SBI allows premature closure of a Fixed Deposit account. According to the SBI website, the penalty for premature withdrawal for all tenors is 0.50% for term deposits up to Rs 5 lakh. For fixed deposits above Rs 5 lakh, there is a % penalty across tenors. SBI pays no interest on deposits of less than 7 days.
In case of premature closure of SBI fixed deposit, the applicable interest will be 0.50% or 1% below the rate applicable at the time of Deposits for the period Deposit remained with the Bank or 0.50% or 1% below the contracted rate, whichever is lower, according to the bank’s website.
PNB Fixed Deposit Premature Withdrawal/Closure Rule
The Punjab National Bank (PNB) charges 1% penal interest at the time of premature cancellation/part withdrawal of domestic term deposits for all tenors. The bank’s website says that the “interest rate payable would be contractual rate minus 1% or the rate under the scheme on the contractual date applicable for the tenor for which the deposit has actually run minus 1%, whichever is lower.”
Axis Bank Fixed Deposit Premature Withdrawal/Closure Rule
In case of premature withdrawal from Axis Bank fixed deposit, there is a 1% penalty if the full amount is withdrawn. In case of partial withdrawal, there is no penalty on the first partial withdrawal of up to 25% of the principal amount. Axis bank doesn’t allow premature withdrawal from a 5-year Tax Saver Fixed Deposit.
HDFC Fixed Deposit Premature Withdrawal/Closure Rule
HDFC Bank levies a penalty of 1% on the applicable rate in case of premature withdrawal, including sweep-ins and partial withdrawals. According to HDFC Bank’s website, the applicable interest rate for premature closure is lower of –
The base rate for the original tenure for which the FD has been booked or the base rate applicable for the tenure for which the deposit has been in force with the bank.
HDFC Bank says that the base rate for the computation of premature withdrawal penalty is the base rate applicable to deposits less than Rs 1 crore as on the date of booking the deposit. For deposits above Rs 5 crore, the base rate is the rate applicable for Rs 5 crore deposits as on the date of booking the deposit.
HDFC bank doesn’t allow partial withdrawal from term deposits booked under preferential rates.