5 min read
Updated on Apr 27, 2023
Among the various means of investment instruments, fixed deposits are regarded as the safest. Hence, most people go ahead with FD when they want to invest their hard-earned money to ensure secured returns.
FD is an investment option where you invest a particular lump sum amount for a specific duration of time to earn returns. The returns can be earned in the form of interest on the amount through the policy duration. The interest rate offered by various banks might differ from one another. The accumulated fund can be withdrawn by the investor at maturity.
If the amount is withdrawn before maturity, there may be penalties imposed by banks. However, if you had to withdraw the FD because of any fatal situation like any terminal disease, education requirement etc., the bank might allow the investor to withdraw the FD by levying a certain penalty.
Let us now take a look at the process of FD withdrawal, in this post. But before that let’s first understand the term withdrawal of FD.
FDs are investments that are available for a particular duration. However, they can be withdrawn prematurely to allow the investor to close the FD account prior to its maturity. But, if you go for premature withdrawal of your FD, you will be levied with an FD premature withdrawal penalty of 0.5% to 1% by the bank. The key reason for the penalty is to prevent funds from withdrawal as well as to promote the habit of saving among investors.
When it comes to FD, there are two kinds of funds – tax saving FDs and regular FDs. Money is not permitted to be withdrawn from a tax-saving FD even if there is an emergency. On the other hand, the bank allows you to withdraw money from your regular FD by levying a certain amount of fine.
For FD premature withdrawal, there are two processes that you can use – via online mode by using a net banking facility and via offline mode by visiting the branch of your bank.
Here are the steps to follow for each of the modes:
If you want to withdraw your FD amount prematurely, you will have to submit a closure form and an application saying that you want to end the FD and cite reasons for the same.
Here is how to write an application (sample) for your understanding:
The Branch Manager,
(ABC Branch, New Delhi),
From: (Your name),
Address (address and other details should be as per your bank record)
Subject: Application for premature withdrawal of FD
My name is Satish (write your name) and I have a FD account in your bank. My FD account number is 26754XXXX (Write the A/C No). I had opened a fixed deposit on 27/7/2022 (write the date in the same format) in the name of Satish (write your name if the FD is in your name or the name of the FD account holder). My FD will mature on 27/7/2025 (write the closure date in the same format). I would like to request you to close my FD account prematurely because I need emergency money for a medical treatment of a family member (write your reason).
I hope you would grant my request by looking into the matter and deposit the money in my savings account with number SB A/C 448866XXX (write the account number of your savings bank). I am attaching the FD receipt and other details as required herewith the application.
Hope you will do the needful as soon as possible.
(Signature that is there in your bank records)
Satish (write your name)
Here are few things to remember while writing application for FD withdrawal:
FDs are risk-free and safe options of investments to earn money. However, deciding to close the account prematurely can make you lose out on returns. Not only will it lower your interest rate, it will also make the bank levy penalties on your FD. You may decide to reinvest the money to avoid penalty charges. However, it is better to avoid withdrawing money prematurely from your FD unless it is very important.
Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit PayBima to Buy Insurance Online.
View this post on Instagram
Yes, FDs generally come with a premature withdrawal option which enables the investor to close the account before maturity. However, it levies a penalty on the investor to avail this facility.
To withdraw an FD amount, you can either go through the process of net banking or visit a branch of your bank.
No, you cannot save tax on fixed deposit returns.
Apart from tax-saving FDs, other FDs do not have a lock-in period. However, if your bank mentions a specific duration as the lock-in period, you cannot break the FD during that period.
Irrespective of the fact that FD is opened individually or jointly, the investor has to go through the same practice for withdrawal/closure.
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
An overview of LIC’s popular comprehensive insurance policy - Jeevan Saral - its benefits to the policyholder, and its special feature - the maturity calculator.
Everything you need to know about the YSR Pension Kanuka scheme, the eligibility requirements to apply, the benefits of the plan, and the different types.
Jeevan Saral Plan comes from the house of LIC, Life Insurance Corporation of India. Also, referred to as Plan 165, Jeevan Saral Policy is one.
LIC is one of the most trusted and reliable public sector insurance companies in India. The company has been serving customers with their varied insurance.
Unless you have planned well for your life after retirement, you may have to face a financial crunch in your old age. Let us take.
If you are willing to invest in market linked plans, there are two ways to do so. One is through single lump sum payment and.
FDs or Fixed Deposits are among the safest kinds of investments that anyone can rely on. FDs for senior citizens is the best option for.
HRA or House Rent Allowance is a part of a salary compensation offered by organizations to their employees above their basic salary. This post will.
India is one of the countries with the biggest number of banks and financial institutions in the world. One such progressive bank, the Karnataka bank,.
Calculators are used to calculate premiums, interest rates and other important aspects related to insurance and investments. Let us take a look at the FD.
Speak to our advisor
Corporate Office : Mahindra Insurance Brokers Ltd ( A Mahindra Group Company ) Sadhana House, Ground Floor, 570 P. B. Marg, Behind Mahindra Towers, Worli, Mumbai 400018.
Licenced by IRDAI License No. 261; License Validity : 17-05-2025; Category : Composite Broker; CIN : U65990MH1987PLCO42609 Member of Insurance Brokers Association of India (IBAI).
Insurance is the subject matter of solicitation.
For a seamless experience, use the latest version of Chrome/Firefox/Internet Explorer.
Copyright © 2023 Mahindra Insurance Brokers. All Right Reserved.