As we all know that if you are withdrawing the money from the fixed deposit account , the rate of interest will be reduced as the penalty for premature withdrawal. This penalty would be different from the each bank based on the tenure of the fixed deposit and how long you continued the fixed deposit with that bank. In most of the banks, the penalty will be 1%. For example, if the interest rates on the fixed deposit is say 10% for 5 years tenure, you are withdrawing after three years, the interest rates calculated will be 9% (10% minus 1% penalty). In the Non Banking Finance Companies (NBFC) reduce 2% as the premature withdrawal.
But, State Bank of India (SBI) will not charge any penalty if the fixed deposit is up to 90 days. The current interest rates for 90 days fixed deposit is 7% at SBI. This would be very useful for those who want to put their money in the short term. For example, instead of keeping your money in saving bank account with less return, it is better to keep in the fixed deposit. Also, after 90 days the premature penalty would be 0.5% only. It has been reduced from 1% earlier. This is the good move from SBI to benefit the customers.
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