Home / Money / Personal Finance /  SBI vs HDFC vs ICICI vs Axis vs PNB vs Yes Bank: Check premature penalty on FDs

For debt investors seeking capital building over a predetermined time period, fixed deposits (FDs) are a good option. Along with fixed rates of return, bank FDs have flexible terms that vary from 7 days to 10 years; however, the bank imposes a penalty rate on early liquidity that is deducted from the interest payout. Premature withdrawals from fixed deposits can transpire in an emergency, so it's essential to be aware of the bank's penalty fees and the specific time period for which they apply in order to avoid paying them. In plain English, penalty rates arise if an investor withdraws the fixed deposit account before it has reached maturity but in the case of tax-saving FDs one can not make premature withdrawals as these are the deposits that come with a lock-in tenure. These rates and charges vary from bank to bank. Following are the current penalty for early withdrawal of fixed deposits that you should be aware of if you are a customer of the banks listed on the topic.

SBI FD Penalty Rates On FD

State Bank of India (SBI) has mentioned on its website that “For Term Deposit up to 5.00 lacs, the penalty for premature withdrawal will be 0.50% (all tenors). For Term Deposits above 5.00 lacs, applicable penalty will be 1% (all tenors)."

“The interest shall be 0.50% or 1% below the rate applicable at the time of Deposits for the period Deposit remained with the Bank or 0.50% or 1% below the contracted rate, whichever is lower," SBI has said on its website.

The aforementioned penalty charges for premature withdrawals from domestic retail term deposits are in effect since April 1, 2017. On domestic term deposits of less than 2 Cr, SBI is now offering an interest rate of (w.e.f 14.06.2022) 2.90% - 5.50% for the general public and 3.40% - 6.30% for senior citizens on deposits of 7 days to 10 years.

HDFC Bank Penalty Rates On FD

HDFC Bank has mentioned on its website that “In case of premature closure of Fixed Deposit (including sweep-in and partial) the interest rate will be 1.00% below the contracted rate or the rate applicable for the period the deposit has remained with the bank, whichever is lower, except for the tenure of 7-14 days and also for deposits >= 25 cr (single fixed deposit booked post Sept 2017). There will be "No" penalty on premature withdrawal of all new FD's booked under the new rate slabs, i.e. >=5.25 crore to < 5.50 crore and >=24.75 crore to <25 crore w.e.f August 29, 2018."

On June 17, 2022, HDFC Bank last changed the interest rates on its fixed deposits. The bank currently offers interest rates ranging from 2.75 percent to 5.75 percent for the general public and 3.25 percent to 6.50 percent for senior citizens on fixed deposits of less than 2 Cr maturing in 7 days to 10 years.

ICICI Bank Penalty Rates On FD

ICICI Bank has mentioned on its website that “interest will be calculated at the rate applicable for the period for which the deposit was held with the Bank or contracted rate of the deposit whichever is lower, plus applicable penalty as below;"vip

A 0.50 percent penalty will be applied to deposits having a maturity of less than one year and there is a 1% penalty for tenures of one year and more on deposits of less than 5 Cr.

ICICI Bank Penalty Rates On FD
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ICICI Bank Penalty Rates On FD (icicibank.com)

Axis Bank

Axis Bank has mentioned on its website that “You can flexibly withdraw the money from fixed deposits before maturity subject to a penalty of 1.0%. However, if you wish to withdraw the money only partially, then Axis Bank levies no penalty on first partial withdrawal of upto 25% of the principal amount. Also note, premature withdrawal is not permitted in case of a 5-year Tax Saver Fixed Deposit."

On July 16, 2022, Axis Bank raised the interest rates on fixed deposits. The bank is now providing interest rates from 2.50 percent to 5.75 percent.

PNB penalty rates on FD

Punjab National Bank has mentioned on its website that “1% penal interest shall be charged at the time of premature cancellation/part withdrawal of domestic term deposits for all tenors and interest rate payable would be contractual rate minus 1% or the rate under the scheme on the contractual date applicable for the tenor for which the deposit has actually run minus 1%, whichever is lower. No penalty is to be levied if the deposit is prematurely closed for the purpose of investment to any other term deposit scheme of the bank provided that the deposit remains with the bank after the re-investment for a period longer than the remaining period of the original contract."

“In case of term deposits with "Either or Survivor" or "Former or Survivor" mandate, premature withdrawal of term / fixed deposits can be allowed to the surviving depositor without seeking the concurrence of the legal heirs of the deceased joint deposit holder, if there is a joint mandate from the joint depositors to this effect. In such cases, the premature withdrawal will not attract any penal interest," PNB has said on its website.

Yes Bank penalty rates on FD

Yes Bank has said on its website that “Premature withdrawal penalty shall be applicable on all deposits booked / renewed for amount less than INR 5 Crore as per the below table."

According to the penalty structure for fixed deposits of less than INR 5 Cr., Yes Bank imposes a penalty rate of 0.50 percent if the tenure of the fixed deposit completed is Less than equal to 181 days and the penalty rate will be 0.75% if the tenure completed is 182 days and above.

Yes Bank has also mentioned on its website that “Premat penalty will be applicable for all types of customers. (eg: Individual, Non-Individual, Senior Citizen, Staff etc.)."

Yes Bank penalty rates on FD
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Yes Bank penalty rates on FD (yesbank.in)
ABOUT THE AUTHOR

Vipul Das

Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
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