As said earlier, recurring deposits carry some features of fixed deposits. And one of such features is the lock-in period of recurring deposits. The RD schemes usually have a lock-in period determined while opening the recurring deposit account. After you start investing, the funds get locked for a predetermined period.What are Premature Withdrawals?
The amount invested in RD is locked in for a definite period. However, certain situations arise whereby an investor may withdraw the amount invested in RD even before the investment term is over. This is known as premature withdrawal, i.e., withdrawal before maturity.Can I Withdraw Money from Recurring Deposit?
This is one of the most asked questions by the investors of recurring deposits. Whether premature withdrawal of recurring deposits is allowed? What if any emergency arises? Can I withdraw money from recurring deposits in emergencies? While the concerns are genuine, there is good news! Recurring deposit accounts do allow premature withdrawal. The rules govern premature withdrawals as per the policy of the financial institution. However, the following points should be kept in mind before withdrawing your funds prematurely:
While we have seen that premature withdrawal of recurring deposits is allowed, it carries certain consequences as well. These include:
In case of premature withdrawals of recurring deposits, the amount available with financial institutions and post offices reduces. Therefore, they might also reduce the interest amount on the recurring deposit. However, as the amount gets repaid, they again bring the interest rate to the normal level.How to Prematurely Withdraw Funds from the RD?
For premature withdrawal, you need to contact the concerned financial institution or the post office where you have opened your RD account. Some banks also provide the feature to withdraw prematurely online from the website. In other cases, you can visit the nearest branch of the bank or the post office and put a request for premature withdrawal of recurring deposit funds. Also, one can send an email to the concerned bank requesting the premature withdrawal. The withdrawal will be allowed as per the rules and policies of the bank or the post office, as the case may be. Shriram City Finance Premature Withdrawal Rules of Recurring Deposit
If you have opened your recurring deposit account with Shriram City, here is the good news! Shriram City allows premature withdrawal earlier than most banks. Here is the premature withdrawal of recurring deposit rules of the Shriram City:
While the premature withdrawal of recurring deposits is allowed, efforts should be made to maintain the RD without withdrawing any amount prematurely. The reason is simple. RD will reap maximum benefits if the amount continuously remains invested for the predetermined tenure. Withdraw from your RD account only if there is an emergency need for funds and you have no other alternative means to arrange money.