A fixed deposit (FD) is a financial instrument where you deposit a lump sum amount with a bank for a fixed tenor at a predetermined interest rate. Breaking an FD means withdrawing the money prematurely before the maturity date. However, breaking an FD before maturity may come with penalties and loss of interest earnings.
Read on to learn more about the process for breaking an FD prematurely.
Prematurely withdrawing an FD online is an easy task However, it comes at the cost of a penalty of 1-2% in the case of both bank and NBFC FDs.
Typically, the process for premature withdrawals is the same across issuers. They are -
Step 1: Visit your FD issuer’s official website
Step 2: Log in to your account using your credentials
Step 3: Navigate to the service request section
Step 4: Opt for ‘Premature Closure’ or a similar option against your FD
Step 5: Enter the necessary details
Step 6: Submit the request
Once the request is submitted, a representative will contact you to guide you through the following steps
The premature withdrawal charges are the same in both offline and online modes. The steps to break an FD offline are
Step 1: Visit the branch of the financial institution where you have the FD account
Step 2: Duly fill the premature FD withdrawal form
Step 3: Submit the form along with the necessary documents
Step 4: After successful submission, your request for FD closure will be processed
Once the FD is closed, your funds will be transferred to your account.
Some of the key aspects that you should remember while deciding to prematurely withdraw are-
To speed up the process of premature withdrawal of FD, keep all the proofs and documents handy
Make sure that you have gone through the fixed deposit receipt and the terms and conditions thoroughly
Avoid investing in a long term fixed deposit if you are anticipating several financial commitments
You will either lose out on interest income or be liable to pay the premature withdrawal penalty
You can break your fixed deposits by either visiting the branch and submitting the premature withdrawal of FD form. You can also do it by visiting the official website of the financier.
To withdraw an FD online, you need to visit the lender’s official website and choose the ‘Premature Closure of Fixed Deposits’ option available in the service request section.