How much penalty is applicable if you break your fixed deposits before maturity? Find out here

Fixed Deposits (FDs) are one of the most sought-after investment options. FDs give you assured returns and are risk- free. However, they have one major drawback- early withdrawal of money. It is tougher to liquidate your FDs than other options like stocks. Furthermore, there is also a penalty charged by banks on premature withdrawals from FDs. These penalty rates are imposed by the lenders if you withdraw from your deposit before it matures. While different banks have different penalty rates, the fee typically ranges between 0.5 and 1 percent of the interest. However, many banks do not charge any penalty on deposits for a period of less than seven days. Here is what the penalty fee of some leading banks on early FD withdrawals: State Bank of India: The largest public sector lender in the country, SBI, states on its website that the penalty for premature withdrawal will be 0.50 percent (for all tenors) if the term deposits up to Rs 5 lakh. For term deposits above Rs 5 lakh, the penalty will be 1 percent on all tenors. “The interest shall 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,” the bank stated on its website. ICICI Bank: The bank will deduct 0.50 percent penalty on FDs having a tenor of less than a year. For deposits maturing in over one year, the penalty will be 1 percent. HDFC Bank: The bank has stated on its website, “For Premature Closure (for all amounts, and for including Sweep In / Partial Withdrawal), the final rate applicable will be 1%”. Axis Bank: Axis Bank will levy a penalty of 1 percent on premature withdrawals. However, if the withdrawal is less than 25 percent of the deposit, penalty will not be considered. Yes Bank: For Yes Bank FD holders, the penalty will be 0.5 percent for deposits with a tenure of 181 days or less and 0.75 percent if the period is 182 days and above. Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.