Axis Bank FD Premature Withdrawal

Axis Bank offers a bouquet of fixed deposit products, which you can explore to your advantage. In addition, it provides a unique opportunity where you can request a premature withdrawal without any hassle or penalty.

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rating
6.7 Crore
Registered Consumers
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Insurance Partners
3.4 Crore
Policies Sold

Axis Bank’s Premature Withdrawal Fixed Deposits:

The third-largest private sector bank continuously works on adding customer-centric features in its fixed deposit products to stay ahead of the curve. Accordingly, AXIS Bank offers a penalty waiver on all term deposits after staying invested for a minimum of 15-months, provided their tenors exceed 2-years. In addition, you do not pay any penalty for 25% first premature withdrawal of the FD principal. 

The convenient flexibility extends across all their FD products comprising cumulative, periodic interest payouts, and recurring deposits. So, let us dig deeper into their product range before learning more about the withdrawal benefits. 

Comparison Between
Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund
Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund
Guaranteed Return Plans
Returns Before Tax
7.5% (TAX-FREE)
Returns After Tax
7.5%
Guaranteed Returns
Yes
Life Cover
Yes
Tax on Profit
Tax Free*
Risk
No Risk
awards
Still Better than FD’s and Debt Mutual Fund
Fixed Deposits
Returns Before Tax
7% (TAXABLE)
Returns After Tax
4.8%
Guaranteed Returns
Yes
Life Cover
No
Tax on Profit
Taxable
Risk
Low Risk
Debt Mutual Fund
Returns Before Tax
8% (TAXABLE)
Returns After Tax
5.5%
Guaranteed Returns
No
Life Cover
No
Tax on Profit
Taxable
Risk
High Risk
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*For annual premium upto ₹5 Lacs

Understanding Axis Bank Fixed Deposit Schemes:

  1. Axis Bank Fixed Deposit:

    It is their flagship term deposit plan where you can open an account with a minimum of Rs.5000 using the internet route. In contrast, the minimum deposit for booking the FD in their branch is Rs.10000. Moreover, you can choose tenors from 7-days to 10-years to grow your money according to your financial objectives. Some critical features of this plan are:

    • Easy transfer from your savings accounts to the Fixed Deposit for a hassle-free opening.

    • Competitive interest rates regardless of the tenor.

    • It offers an automatic roll-out facility for interest credit to your savings account or a different savings account. 

  2. Axis Bank Digital Fixed Deposit:

    Based on the depositor’s full KYC compliance, it is a first-of-its-kind FD product in the banking industry. Moreover, you do not need a savings account with the bank for a hassle-free FD account opening with your basic details. In addition, the Digital Fixed Deposit features are:

    • Open the account  online with a minimum Rs.5000 initial deposit for tenors up to 10-years

    • No penalty for withdrawal of up to 25% of the principal prematurely

  3. Axis Bank Tax-Saver Fixed Deposit:

    The FD combines the advantages of tax savings and competitive interest rates in a fixed tenor of 5-years. The FD comes in three options for investment amounts from Rs.100 to Rs.1.5 Lakhs. 

    • Tax Saving Reinvestmet Deposit

    • Tax Saving Quarterly Interest Payout

    • Tax Saving Monthly Interest Payout

    In addition, you can hold the account singly or jointly while enjoying a tax deduction up to Rs.1.5 Lakhs under Section 80C of the IT Act, 1961.

  4. Axis Bank Auto Fixed Deposit:

    Axis Bank understands the depositor’s need to maximize returns on the invested funds. Accordingly, the Auto FD transfers sums from the savings bank when the balance exceeds Rs. 25000. However, the automatic transfer is limited to Rs.5000 and its multiples. A few scheme’s critical features are:

    • The minimum tenor is 6-months, and the maximum is 5-years

    • It maximizes your interest-earning by deploying idle funds in your savings account

    • Your liquidity is intact as the shortfall in the savings account replenishes with automatic sweep-outs

  5.  Axis Bank Fixed Deposit Plus:

    You earn a higher interest rate over the card rate, but the catch is that the minimum deposit is Rs. 2 Cr. In addition, you can choose the interest application method – simple or compound. The choice of tenor remains flexible from 7-days to 10-years. 

  6. Axis Bank Recurring Deposit:

    You can build your deposit through systematic monthly contributions in tenors from 6-months to 10-years. In addition, you can open an account online with a minimum monthly amount starting from Rs.500. 

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Axis Bank FD – Premature Withdrawal:

FDs come with a fixed tenure regardless of the interest rate application method. Therefore, whether you choose cumulative or periodic interest payout, the principal stays invested until the FDs tenor. However, your FD is liquid as Axis Bank, like others, permits premature withdrawal to tide over financial emergencies. 

The premature withdrawal is conditional and invites specific penalties. For example, the pre-closure of a cumulative FD entails payment of the principal and the accrued interest at the applicable card rate for the period until the closure. Similarly, for periodic interest payout FD, the principal is payable as the closure proceeds in addition to the accrued interest for the fractional period, if any. So, first, let us check the charges. 

Axis Bank FD – Premature Withdrawal Charges:

Axis Bank offers you enough flexibility to pre-close your FD account to meet financial emergencies. However, what makes the bank stand out from the others is that you have an additional option – partial withdrawal of the principal amount. It helps you to tide over the financial crisis without closing the FD.

Therefore, you pay a penalty of 1% for pre-closure of the FD. The applicable interest rate is for the tenor until closure rather than the contract. In contrast, the penalty is nil for partial withdrawal of up to 25% of the principal. 

Axis Bank FD – Premature Withdrawal Process:

The premature closure of your Axis Bank FD is straightforward and uncomplicated under three options.

  1. Internet Banking:  

    You can close the FD prematurely in a few steps after logging in to their net banking module using your credentials.

    • Click on Accounts on the home page.

    • Select Deposits  and then select the specific FD 

    • Next, choose Break FD from the More Services option

    • Select the account for credit 

    • Finally, feed the NetSecure code and submit

    • The pre-closure request processing is immediate

  2. Axis Bank Mobile App: 

    It is even simpler here, needing only a few taps.

    • Click on FD/RD

    • Select the FD number to close

    • Then, tap on Close Fixed Deposit

    • Feed your MPIN and submit

    • The pre-closure process is over

  3. Axis Bank Branch:

    While the above two are online processes, you can visit the Axis Bank branch and request the pre-closure of your FD. Then, all you need is a valid photo identity proof and the FD Advice, duly signed by all the depositors. 

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Axis Bank FD – Avoiding Premature Withdrawal Charges:

Axis Bank stands out from the others for its unique offers where you can avoid the pre-closure penalty charges. However, there are conditions attached to it. So, let us find out where you can prevent premature encashment penalties. 

  • Fixed deposits with a tenor of 2-years or more and closed prematurely after 15-months from the opening date do not invite a penalty. However, FDs below Rs.5 Cr and opened or renewed after 15 December 2020 are eligible for a waiver.

  • The premature closure penalty does not apply to the withdrawal of up to 25% of the FDs original principal. However, the waiver applies to the first occasion while you pay the appropriate penalty in similar subsequent withdrawals.

  • You do not pay any penalty if you request premature closure of the FD within 14-days from the opening date. The applicable interest is according to the card rate for the period rather than the contract. 

In Conclusion:

Premature closure of FD is part and parcel of the investment, which provides liquidity as a significant property. However, Axis Bank FDs introduce an industry-first feature for avoiding penalties related to their premature encashment. So, with the discussion covering different FD products in the Axis Bank’s term depots bouquet and interest application, you clearly understand its implications. In addition, you also know how to avoid penalties while withdrawing your desired amount prematurely.

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^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
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