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.
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
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For accounts opened on or after December 1, 2011, no interest will be paid if the deposit amount is withdrawn within the first six months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.
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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.
No, a post office will not allow you to prematurely withdraw within 6 months from the opening date.
Yes, you can invest in term deposits from other issuers. To find offers with attractive rates and terms, visit Bajaj Markets.
No, you will have to pay the penalty if you decide to prematurely withdraw your post office FD.
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.