FD Holders Alert: 10,000 free withdrawal or a direct blow on 5 lakhs – know the new rule immediately
Fixed Deposit (FD) is a financial product offered by banks and financial institutions in which customers deposit their amount for a fixed period and receive interest on it. Recently, the Reserve Bank of India (RBI) has made some important changes in the premature withdrawal rules of fixed deposits. These new rules have become effective from January 1, 2025. These rules aim to provide more flexibility to customers and help in financial emergencies.
Under these new rules, small deposits (up to ₹10,000) can be withdrawn without interest within three months. Also, for large deposits, customers can withdraw 50% of their principal or ₹5 lakh (whichever is lower) without interest. This change is important for those who are facing sudden financial needs.
In this article, we will provide a detailed overview of the new premature withdrawal rules for FDs, discussing their advantages, disadvantages, and other related aspects.
Summary of FD Withdrawal Rules
| Speciality | Description |
| Small Deposits | An amount up to ₹10,000 can be withdrawn without interest in three months. |
| Large Deposits | Withdrawal allowed for 50% or ₹5 lakh (whichever is lower) for amounts exceeding ₹10,000. |
| Emergency Medicine | In case of serious illness, the entire principal amount can be withdrawn. |
| Interest | There will be no interest on the withdrawn amount. |
| Information | NBFCs will have to give information about maturity of deposits two weeks in advance. |
| Process | Withdrawals can be done via both online and offline modes. |
Table of Contents
Benefits of FD Withdrawal
- Immediate availability of funds: Premature withdrawal allows customers to withdraw funds immediately, which is helpful in case of unexpected expenses such as medical emergencies.
- Financial flexibility: Customers can use the funds as per their needs, such as reinvesting in high-interest investments.
- Opportunity to repay loan: Withdrawing money from FD can be a good option to repay a high-interest loan.
Disadvantages of FD Withdrawal
- Loss of interest: The customer may suffer loss of interest in case of premature withdrawal.
- Impact on long term plans: It can be detrimental if it impacts a person’s long term financial plans.
- Penalty Charges: Some banks levy penalty charges on premature withdrawal.
FD Withdrawal Process
The process of prematurely withdrawing an FD is simple and can be done in the following ways:
- Offline Process: Customers can close the FD by visiting their bank branch and filling the required forms and submitting the documents.
- Online process: Many banks also offer the facility of withdrawal through online mode, but this is applicable only to those FDs that were booked online.
conclusion
The new premature withdrawal rules for FDs offer more flexibility and convenience to customers. These rules are especially helpful for those who are facing sudden financial needs. However, customers should ensure that they make the decision keeping in mind their long-term investment goals.
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