How To Partially Withdraw A Fixed Deposit
A Fixed Deposit is a secured saving option wherein you can put a certain amount of money in a deposit account for a fixed time at an agreed interest rate. Upon maturity of the deposit, you will receive the capital deposit amount as well as the interest accrued on the deposit over time. Here we discuss how to break a Fixed Deposit.
Banks allow you to withdraw the fixed deposit amount prematurely or upon maturity. However, partial withdrawal before maturity is not allowed if the account is a Tax Saver/Non-Withdrawable Fixed Deposit. Most banks have a lock-in period of five years for a Tax Saver Fixed deposit. Usually, banks charge a penalty for withdrawing any Fixed Deposit prematurely/partially.
With HDFC Bank, you can choose to open a Fixed Deposit account with tenures ranging from seven days to 10 years. Here we will discuss how to break a Fixed Deposit account or partially withdraw funds from it.
Withdrawal upon maturity:
Upon maturity of your Fixed Deposit, you can either withdraw the total amount or create another fixed deposit. If you wish to liquidate or withdraw the deposit upon maturity, you can do so online or by visiting the branch.
You can log in to HDFC Bank NetBanking, go to the ‘Fixed Deposits’ tab and click on withdrawal. The amount will be transferred to the customer’s Savings Account. If the account is held jointly, the Fixed Deposit can be withdrawn online only if the mandate is updated.
You can also visit a branch near you and submit the deposit advice issued to you at the time of Fixed Deposit Account opening. The deposit advice has to be submitted after all account holders duly sign it.
If your account has matured and instruction is not updated the bank may choose to manage your account.
The bank may auto-renew your Fixed Deposit for the same period as the original deposit at the prevailing interest rate
Premature/ partial withdrawal:
You can break your Fixed Deposit prematurely in case of a personal emergency or for any other business/personal requirement. If you break the deposit prematurely, the bank charges a penalty.
So, if you want to break your Fixed Deposit for any personal exigencies or any other purposes, check the benefits against the penalty.
Premature Fixed Deposit withdrawals are of two types, either partial or complete.
You can log in to NetBanking and raise a request for premature withdrawal. Locate the Fixed Deposits tab within your NetBanking account and raise a request for an early withdrawal. You can also visit the nearest branch to raise a request for withdrawal. Following this, the funds will be transferred to the linked account. Partial withdrawal of Fixed deposit is not allowed via NetBanking.
HDFC Bank allows for premature withdrawal of funds from a Fixed Deposit account. However, the rate of interest is lowered for deposits liquidated before the maturity period. In case you withdraw the full amount, the interest you accrue will be reduced. If you withdraw a part of the funds, the interest on the withdrawn amount will be lowered. The interest will be the same as the contracted rate for the remaining amount.
The interest rate applicable for premature closure (Sweep in /partial withdrawal) of deposits (all amount) will be lower if:
The rate for the original /contracted tenure for which the deposit has been booked OR
The base rate applicable for the tenure for which the deposit has been in force with the bank
For deposits booked on or after March 7, 2019, the base rate is the rate applicable to deposits of less than ₹2 crore as on the date of booking the deposit. Prior to this the base rate is the rate applicable to deposits of less than ₹1 crore as on the date of booking the deposit. The base rate (for deposit amount >= ₹5 crore), is the rate applicable to deposits of ₹5 crore as on the date of booking the deposit.
Alternatives to partial/premature withdrawal:
Super Saver/OD against FD in Current Account Facility: Avail up to 90% of overdraft on your FD instantly to supplement your household or business requirements. Overdraft facility against Fixed Deposit can be availed in a Saving or Current Account. Interest is applicable only on the drawn amount at 2% above the Fixed Deposit rate for the period that the money is used.
Sweep-in facility: Avail sweep-in facility and enjoy easy liquidity between an FD and bank account linked to it. Link multiple deposits to your Savings/Current account. With this facility, any deficit in your Savings or Current Account is taken care of – the exact value comes from your Fixed Deposit. Deposits are broken down in units of ₹1thereby minimising Interest Loss. Earn interest on your deposit until it is swept-in, while the remaining Fixed Deposit continues to earn you interest at the contracted rate. Sweep in of funds from your Fixed Deposit (FD) to Saving/ Current account will trigger on Last in First out basis (LIFO)
Partial withdrawal/sweep in is not allowed on deposit >= ₹5 crore to less than ₹25 crore.
*According to HDFC Bank’s Terms & Conditions for Fixed Deposit Accounts:
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 crore (single fixed deposit booked post 1 September, 2017).
There will be "No" penalty on premature withdrawal of all new FDs 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.
To open a new Fixed Deposit Account, click here.
Read more on how your Fixed Deposit can become your next asset!
Use FD Calculator and Get Details of the maturity amount and interest earned on deposits.
*Terms and Conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances