Fixed Deposits are the safest investment instruments. You invest the amount of your choice as the fixed deposit in a lump sum for the set duration and earn interest on it over the term period. Upon maturity, you can withdraw the funds that you have accumulated over the years as your investment returns. The minimum amount and the term duration for the fixed deposit vary from bank to bank.Read more
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You can not withdraw the amount that you have invested till maturity. In case of emergencies, like terminal illness, education, or death, banks allow you to withdraw your funds prematurely. Banks do impose penalties on untimely withdrawals.
There are tax-saving and regular fixed deposits. You cannot withdraw tax-saving fixed deposits even in emergencies. You can, however, liquidate your investment in case of some urgent needs. After going through your application to withdraw a fixed deposit, the bank allows you to withdraw the amount you have invested. Some banks charge 0.5% to 1.00% of the interest rate as a penalty on the premature withdrawal. Some banks impose a penalty if you invest the amount back again after the emergencies. If you break the fixed deposit before 7 days of investing in it, the bank will not pay you any interest on that.
There are two ways through which you can close the fixed deposits, i.e., through net banking and by visiting the branch. Steps to initiate the withdrawal from the fixed deposit for both modes are as follows:
Step 1: Visit the bank's official website.
Step 2: Log in with your customer Id.
Step 3: Click on the fixed deposit tab.
Step 4: Click on the close A/C prematurely tab.
Step 5: Fill in all the required details.
Step 6: Mention the reasons for closing.
Step 7: Click on confirm tab.
Step 8: Insert the OTP or the password you received on your registered mobile number.
Step 9: Your fixed deposit will be closed, and money will be deposited into your account.
Step 1: Visit the bank's local branch.
Step 2: Fill out the fixed deposit closure form and the application for the fixed deposit withdrawal.
Step 3: Submit fixed deposit bond and other required documents.
Step 4: After verifying all the details, money will be deposited into your account.
While submitting the Fixed Deposit closure or the premature withdrawal form, you need to submit the application stating the reason behind your actions and the emergency for that you require the funds. Following is one of the formats of the application for the withdrawal of a fixed deposit.
The Branch Manager,
(Branch address in one line/City name),
Address (As mentioned in bank records),
Phone no. (As mentioned in bank records),
Email ID (As mentioned in bank records)
Subject: Request for the premature withdrawal of fixed deposit / Closure of fixed deposit.
I am a fixed deposit account holder in your branch. My fixed deposit account number is FD A/C__________ (Mention account number). I had opened fixed deposit on _______ (mention correct date in dd/mm/yyyy format) in the name of _________ (mention the fixed deposit account holder’s name, if it is on your name mention that). My fixed deposit will mature on date __________ (mention correct date in dd/mm/yyyy format). I am writing this letter to you for premature withdrawal of fixed deposit/closure of fixed deposit because _________ (mention the reason here).
I am requesting you to kindly look into the matter and credit the amount to my savings account. My savings bank account number is SB A/C________ (mention savings bank account number). I am hereby enclosing the FD receipt along with all the required documents.
Please do the needful at the earliest.
(your signature as it is in bank records)
There are a few things you need to keep in mind while writing a fixed deposit withdrawal application:
Double-check all the information that you have mentioned in the letter, mainly account numbers.
Bank will ask you to submit the original fixed deposit bond or receipt.
If you have misplaced your original fixed deposit bond or receipt, mention that in the letter, or if you have the photocopy of the original, enclose that with the letter.
Some banks need information regarding advice you received at the time of taking the fixed deposit.
Some banks might ask for other supporting documents of the reason for which you are breaking the fixed deposit. Kindly mention those or provide them with documents.
Fixed deposits earn money for you without any risk. Even though it is the safest route, it can still be a great loss for you if you decide to break it prematurely. The interest rate will be a lot lower on your returns. Also, banks levy penalties on prematurely withdrawing from the fixed deposit. Penalty charges can be avoided if you choose to reinvest the money. Therefore, you are advised to refrain from withdrawing prematurely from the fixed deposit unless it is necessary.
Rate of Interest (Yearly)