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SBI is an Indian giant in the field of Public Sector Undertaking (PSU) banks offering a wide range of plans and products. The SBI FDs offered by the company are available in varying tenure starting from 7 days to 10 years.
The best thing about FDs is that they are regarded as a safe means of investment. In addition, these plans are considered to be liquid as they can be readily converted to cash. Thus, one can open or close an FD account anytime as per need. You can either continue an FD plan till it matures or may withdraw the amount before the maturity date if you have a need.
Nevertheless, closing an FD account prematurely is not advisable as you are required to pay a nominal penalty to the insurer as fine if you withdraw the FD before maturity. This is generally done to discourage people from frequently withdrawing FDs and to imbibe the habit of saving in them.
So, let us read in this post about the premature withdrawal penalty calculator and its functioning?
Premature withdrawal, also known as breaking the FD, is when the invested funds are withdrawn before the maturity period has passed. If the investor needs money right away, they can choose the premature withdrawal option and withdraw the money in FDs.
Before taking a look at how the SBI FD premature withdrawal penalty calculator works, let us understand what an SBI FD premature withdrawal penalty calculator is.
An SBI FD premature withdrawal penalty calculator is a tool that calculates the penalty fee to be levied on an FD account if the account holder prematurely withdraws the policy.
Below is the penalty calculation:
You must note here that the investor receives no interest on deposits if the FD is invested for a period of less than 7 days. Moreover, the Rate of Interest (ROI) received in that case can be either:
Suppose you opened an FD worth INR 1 Crore with SBI for a term of 2 years at a rate of interest of 5.10% per annum. Now, after 1 year of the FD, you needed money urgently and wanted to withdraw it prematurely. In this scenario, the penalty that is levied is 1%. Further, you will get the FD amount at a revised rate of interest of 4.00% per annum rather than the original 5.10%.
Let us take a look at the advantages of SBI FD Premature Withdrawal Penalty Calculator now.
The SBI FD Premature Withdrawal Penalty Calculator is generally used to calculate the financial implications of liquidating an FD account prematurely. So, this calculator evaluates how much money would be paid if you close the FD before the completion of its tenure. The best part is, it can be done in just a click of a button.
Not only this, the use of SBI FD Premature Withdrawal Penalty Calculator makes the process of calculation smooth and instant as compared to the error-prone manual calculations.
Here are some key advantages of using the SBI FD Premature Withdrawal Penalty Calculator:
Though the rate of interest of FDs keeps changing on a regular basis as per the prevalent scenario of interest rate. However, the FDs which are once contracted stayed fixed for the particular term of the deposit. And in case the depositor plans to make the FD liquid or to redeem the FD before its maturity date, the bank levies a penalty on the investor depending on their policy terms and conditions.
Now, the SBI FD Premature Withdrawal Penalty Calculator is an easy online tool that helps investors to guess the exact amount that needs to be paid as penalty for closing the account prematurely. It further helps them to control the penalty amount that has to be paid as per the premature date when you plan to withdraw the FD.
Moreover, the SBI online FD penalty calculator also provides the investor a platform to regulate the amount of money that he/she has to forego because of premature withdrawal of the FD.
To Sum Up
SBI premature closure of FD penalty may cost you an amount because of the charge levied as well as the reduction in the interest rate that was fixed at the time of procuring the FD. Hence, it is important to check the terms and conditions of a bank’s premature withdrawal while planning to open an FD account.
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When you already know the rate of interest you would have to forego in the FD as well as the penalty that you would have to pay, you would come to know about the amount that is due on premature withdrawal of an FD during an emergency.
No, you don’t have to pay any money for using the SBI FD Premature Withdrawal Penalty Calculator as it is free to use.
No, it is not at all time consuming. In fact, once you input the various details required in the tool, such as principal amount, date of deposit and original tenure etc., all you need is to tab the submit button to know the penalty amount offered by the premature FD calculator.
The income tax payable on the interest amount of an FD account differs depending on the investor. The tax saver FD premature withdrawal calculator does not consider the income tax implications at the time of calculating interest. Hence, the estimated amount shown by the premature withdrawal calculator is indicative in nature and is subject to tax deduction.
Yes, the projected amount as shown by the calculator can vary if the date of premature withdrawal varies.
PayBima Team
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.
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