Fixed deposits are considered the first step towards building a corpus where the hard-earned money is safely locked-in for a certain period and comes with reasonable returns. But, falling interest rates and penalty for premature withdrawal was a concern for many.
Axis Bank account holders have some good news to cheer for. The lender announced waiver of penalty levied on premature redemption of fixed deposits that were booked or renewed on or after December 15 last year. This is valid for fixed deposits with tenure of two or more years.
Now, customers will be able to withdraw their fixed deposits after 15 months without having to pay any penalty. Axis Bank is the first leading private bank to introduce such a rule for its retail customers, non-senior and senior citizens holding FDs with the bank.
Fixed deposits allow you to access your money at any time but only after paying a penalty.
Other banks that levy charges on early withdrawals are the State Bank of India, ICICI Bank, HDFC Bank and Kotak Mahindra bank. They charge a penalty of 0.5-1 percent for early closure of fixed deposits. SBI charges 0.50 percent penalty across all tenures of investments of up to Rs 5 lakh. If a FD is withdrawn within seven days, then the bank does not pay any interest.
For instance, you hold a Rs 4 lakh FD with SBI then the bank will charge Rs 2000 as penalty from your deposit amount for early withdrawal. If the FD amount is Rs 20 lakh, then the bank will deduct Rs 20,000 as penalty.
One can avail the premature withdrawal facility offline as well as online. For offline, one can visit the bank branch with FD receipt, premature withdrawal form and other documents. Alternatively, one avail internet banking or mobile banking facility to withdraw the FD.
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