A term deposit account can be opened by an individual singly or jointly with others. Minors of the age of 10 years and above can also deposit under this scheme on their own name on giving their proof of age.
For making a pre-mature withdrawal on term deposits, a certain amount is charged as a penalty by the concerned bank. Premature withdrawal facility on fixed deposits allows the depositor to close the FD before the date of maturity arrives. As banks don’t usually entertain premature withdrawal of term deposits, the penalty is charged. The penalty generally ranges between 0.5 per cent and 2 per cent. Many banks – including State Bank of India (SBI), ICICI Bank, Kotak Bank, and HDFC Bank – have specific terms and conditions for those who want to make premature withdraws from their deposits before the completion of the maturity period.
Having said so, some banks also offer a premature withdrawal facility with zero penalty charges, such as Punjab National Bank under their PNB Sugam Term Deposit Scheme. This public sector bank doesn’t impose any penalty on the depositor on premature withdrawal facility, additionally, it also facilitates partial withdrawal.
A term deposit account can be opened by an individual singly or jointly with others. Minors of the age of 10 years and above can also deposit under this scheme on their own name on giving their proof of age. This account can also be opened by a company or corporate body, partnership firm or proprietorship firm, commercial organization, etc.
The PNB Sugam Term Deposit Scheme can be opened with a minimum deposit of Rs 10,000, and up to a maximum amount of Rs 10 crore. The tenure of this deposit is set from 46 days to 120 months.
The depositor has the facility to withdraw any amount before maturity subject to a minimum withdrawal of Rs 1000 – at a time. This can be done in an emergency without the depositor breaking the entire deposit and therefore not losing interest on the remaining deposit under the scheme. Even though no penalty will be levied in respect of the partial withdrawal of deposit, note that the value of the deposit – the principal amount, will be reduced accordingly by the bank.
With this scheme, the depositor has the option to draw their interest either monthly or quarterly or on maturity. The interest will be paid on a compounded basis if the period of money deposited is 6 months and above.