- How to close the FD before the maturity date
- FD locking period for foreclosure
- Document required for FD foreclosure
Fixed deposits (FDs) are among the most popular instruments to save and invest money that offers good returns and is easy to open. Putting it simply, an investor puts a lump sum amount in his/her bank for a fixed tenure at an agreed rate of interest, and at the end of that tenure, the investor receives the amount he has invested plus compound interest on the same amount. Thus, FDs are also called term deposits.
Bank FDs are among the safest and most preferred investment options and quite popular in India among risk-averse investors. Banks offer FDs with a wide range of tenure options ranging from 7 days up to 10 years. Moreover, FDs are equally liquid investment options, i.e., one can open and close it anytime as per their convenience.
Investors can choose to continue their FDs till maturity or access it before the time via premature withdrawal. However, it's not advisable to prematurely close your FD. In case of dire need or emergency, the investor can opt for a fixed deposit foreclosure procedure, for which banking institutions levy an FD foreclosure fee as a penalty.
FD offers various advantages:
The investor can opt for FD foreclosure in full or parts (i.e., FD foreclosure or partial withdrawal). There is a nominal penalty charged on FD foreclosure and withdrawal. However, the money is transferred to the depositor's account in no time. In case of partial withdrawal, investors can withdraw a part of the entire FD value. The withdrawal amount will be credited to the investors' savings bank account while remaining invested and continuing to earn interest.
There are both online and offline procedures available for closing the FD before the maturity date.
For investors looking for FD foreclosure, below is the list of guidelines mandated by the Reserve Bank of India:
For investors looking for FD foreclosure, the following set of documents are required:
The following are the disadvantages of FD foreclosure. Hence, it's not recommended to close the FD account prematurely unless there is a dire need for money in case of an emergency.
We at Shriram City Union Finance Limited have the most reliable fixed deposit schemes for your secured and better future. Contact us any time to understand in detail about interest earned on FD renewal. Moreover, we follow easy ways for premature withdrawal of fixed deposits if a customer deals with a cash crunch.
The fixed deposit of Shriram City Union Finance limited is rated FAAA/Stable by CRISIL and MAA+ with Stable Outlook by ICRA.
Yes, making a fixed deposit withdrawal before the maturity period comes up with the penalty charges. The amount of penalty differs from bank to bank based on their policies.
Usually, if the fixed deposit is created offline, it will not be reflected in the FDs list created online. But still, some banks have given the provision to close all the fixed deposits via online mode. Another way to close the offline FD sitting from the comfort of home is by requesting customer care.
It is a certain percentage of the interest amount the depositor earned on the fixed deposit. This percentage varies
Usually, the penalty is levied on premature withdrawal of fixed deposit. Still, some financial institutions are not charging any penalty if you have held a fixed deposit for a minimum of 7 days.
No, you cannot break that fixed deposit.
No, as per the Income Tax Act, you cannot break tax-saving FDs before 5 years.
Yes, the joint account holder’s signature is required for closing the fixed deposit.