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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July 13, 2011 at 2:10 am
I just have one doubt as far as your example goes.
I don’t think I’ll get 9% as interest if I withdraw after 3 years.
Lets say when one opens the FD, interest rate for 3 year FD is 8%.
Then, when I will close my FD prematurely, I’ll get 8-1=7% as rate of interest.
Isn’t it?
July 13, 2011 at 4:30 am
No. You have opened the FD for five years, so it will be calculated based on that.
Thanks,
Krishna
July 18, 2011 at 1:34 am
I have booked FD with SBI for 1000 days to take advantage of high interest rate a month ago. However for more than 1000 days duration, the interest rates were low. However recently they extended the higher interest rate benefit upto 10 years. Is it possible to extend duration of the deposit now from 1000 days to say 5 years without attracting any penalty.
August 18, 2011 at 2:48 am
Krishna you are wrong.
If FD rate for 5 years – 10%
and FD rate for 1 year is 7%
I would be always open for 5 years and close after 1 year to get 10-1=9% interest rate.
In actual it will be 7-1=6% ( Indian Thoughts told correct )
August 18, 2011 at 2:48 am
Krishna you are wrong.
If FD rate for 5 years – 10%
and FD rate for 1 year is 7%
I would be always open for 5 years and close after 1 year to get 10-1=9% interest rate.
In actual it will be 7-1=6% ( Indian Thoughts told correct )
Regards,
Vishnu
November 13, 2011 at 12:08 pm
I invested 5 lakhs for 9 years in state bank of india at 9.75% two months before.Now i want to withdraw the money as early as possible but do not know as to how much money will be deducted in the so called PREMATURE WITHDRAWAL whose calculation i do not understand.Please someone help.
February 8, 2012 at 3:46 am
@Krishna: Your information is very useful for me. *My Question: IS THERE ANY SCHEME THAT, if i invest Rs.4000000 in SBI Fixed Deposit, can it be withdrawn after 30 days i.e. 1 month? What would be the interest rate of the bank? How much i will get in the next month?
February 8, 2012 at 3:50 am
@Krishna: I am trying to open a Saving Account at SBI bank. At the same time, i am also trying to open a Fixed Deposit Account at the SBI bank. My question is: Do i need to open two (2) seperate Accounts at the same SBI bank?
October 6, 2012 at 7:32 pm
Hi,
I have started Recurring Deposit in SBI from April of 10000 every month. Due to some unavoidable reason, I was not able to deposited after June in this account. Should I have to be penalies and have to pay some interest on it. or in next few month i will deposit the residue amount and enjoy my benefit after that….Please recommend me ..I m waiting for your reply. Thanks