Post office fixed deposit or post office term deposit comes with a sovereign guarantee by the Indian government. In a post office FD, you can invest your money for a tenor of up to 5 years. The interest is payable annually but is calculated quarterly.

 

Depending on the chosen tenor, the interest rate varies from 6.9%-7.5% p.a. However, there could be unforeseen circumstances that might require immediate funds. In such cases, you can choose to make a premature withdrawal from your post office FD.


Read on to learn more about the FD premature withdrawal penalty terms and conditions.

Post Office Fixed Deposit Premature Withdrawal Penalty

The post office FD withdrawal process is only possible after the first six months. Here, the withdrawal attracts a penalty charge, as it would if you were to prematurely withdraw your FD with other issuers.

 

Also, there are a few things to keep in mind when opting for a premature withdrawal of a post office term deposit.

  • You need to pay a premature withdrawal penalty of up to 2%

  • You can make the withdrawal only after six months from the date of deposit

  • You will get only the invested amount at the time of your withdrawal

  • You will receive the interest amount only on the maturity date

An Example to Understand the Premature Withdrawal Process

Assume you have opened a fixed deposit of ₹1 Lakh for a tenor of three years on April 1, 2020. After a year, on April 1, 2021, you require the money and wish to withdraw your entire amount from your fixed deposit

 

You will be eligible to withdraw the money as the first six months have passed. At the time of withdrawal on April 1, 2021, you will get the entire ₹1 Lakh that you invested.

 

However, you will receive the interest earned on your principal amount of ₹1 Lakh for a year after the maturity date is over, which is on or after April 1, 2023.

  • For accounts opened on or after December 1, 2011, no interest will be paid if the deposit amount is withdrawn within the first six months

  • If you withdraw the amount between 6 months and 1 year, the prevailing interest rate of the post office savings account at that time will be paid to you

  • In case you withdraw your amount after a year, the payable interest will be 2% less than the specified interest rate.

 

When it comes to investing in an FD with the post office, premature withdrawal terms are rigid, and you must be aware of them before you invest. Make a suitable decision that aligns well with your financial goals. 

 

In case these terms do not work for you, you can consider other reliable FD options that offer high returns. Choose from various FD options across multiple issuers only on Bajaj Markets. 

 

Here, you can book an FD with ease and get terms that can help you truly generate wealth, no matter your investing timeline.

Disclaimer

The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort. 

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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FAQs on Post Office FD Premature Withdrawal Penalty

How can I transfer the post office FD account from one branch to another?

It is a simple process. All you need to do is submit a transfer application to your existing branch or the branch where you want to continue the deposit. Submit your KYC documents and passbook to the respective branch.

Is it possible to carry out a post office premature withdrawal process for FDs before 6 months?

No, a post office will not allow you to prematurely withdraw within 6 months from the opening date.

Are there alternatives to post office savings schemes?

Yes, you can invest in term deposits from other issuers. To find offers with attractive rates and terms, visit Bajaj Markets.

Can I avoid the post office time deposit premature withdrawal penalty?

No, you will have to pay the penalty if you decide to prematurely withdraw your post office FD.

What is the penalty for premature withdrawal of a fixed deposit in the post office?

If you choose to withdraw your investment, you need to pay a post office FD premature withdrawal penalty of 2% less than the prevailing FD interest rate.

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