Bandhan Bank FD Premature Withdrawal

What is Bandhan BankFD Premature Withdrawal?

Bandhan Bank FD premature withdrawal means closing your fixed deposit before it matures. This option is available in case of urgent needs like medical or personal emergencies, but some conditions apply. When you withdraw early, the Bandhan Bank FD rate is recalculated based on how long the money stayed in the account, and the interest paid may be lower than the original rate.

How to Close a Bandhan Bank FD Prematurely?

You can complete the Bandhan Bank premature FD withdrawal process either online or offline, as per your convenience.

1. Online Method

   Follow the steps below to close your Bandhan Bank FD online:

   • Log in to Internet Banking or Mobile App: Access your Bandhan Bank account through the official website or mobile app.
   • Go to Fixed Deposits: Navigate to the “Fixed Deposits” section (or “My Deposits”).
   • Select the FD You Want to Close: Choose the active FD you wish to close prematurely.
   • Choose “Premature Withdrawal”: Tap or click on the “Premature Withdrawal” option.
   • Confirm Details: Review how much interest you’ll get (based on actual duration) and any penalties.
   • Submit Request: Confirm the withdrawal request. The money (principal + final interest) will be credited to your savings account.

2. Offline Method 

   You can also close your FD by visiting a branch. Here are the steps to follow:

   • Visit a Bandhan Bank Branch: Go to the nearest Bandhan Bank branch with your FD receipt or account details.
   • Request Premature Closure Form: Ask the bank staff for the “Premature FD Closure” form.
   • Fill the Form: Provide the FD account number, amount, reason for early closure, and sign it.
   • Submit the Form: Hand over the filled form and your original FD receipt to the bank officer.
   • Provide Debit Instructions: Give your account number where you want the funds credited.
   • Collect Acknowledgement Slip: Keep this slip; it proves you submitted the request.
   • Funds Processed: The branch will calculate interest based on how long the FD was held, deduct any penalty, and transfer the amount to your account.

Disadvantages of Bandhan Bank FD Premature Withdrawal

The following are key points to consider before choosing Bandhan Bank FD premature withdrawal:

• Lower-Than-Expected Returns: On premature withdrawal, Bandhan Bank recalculates interest based on the actual tenure completed. The bank applies the lower of the booked rate or the applicable rate for that period.
• Impact on Financial Planning: Premature closure of a Bandhan Bank FD may disrupt planned financial goals, as the early withdrawal can lead to lower returns and alter the timing of fund availability.
• Impact on Loan Against FD: If you withdraw your Bandhan Bank FD before maturity, it may affect any loan secured against the deposit. Since the FD serves as collateral, closing it early can lead to changes in loan terms or possible cancellation of the loan.

Tax Implications on Bandhan Bank FD Premature Withdrawal

When you withdraw your Bandhan Bank Fixed Deposit before maturity, the interest is recalculated at a lower rate for the actual tenure and is fully taxable under “Income from Other Sources” as per your income slab. As per Section 194A of the Income Tax Act, Tax Deducted at Source at 10% is deducted if the total interest in a financial year exceeds ₹50,000 for regular individuals and ₹1,00,000 for senior citizens. If you don’t submit your PAN, TDS is deducted at a higher rate of 20%.It’s important to report this revised interest correctly when filing your income tax return.

How to Avoid Bandhan Bank FD Premature Withdrawal?

Here are some smart ways to avoid Bandhan Bank FD premature withdrawal:

• Monitor your cash flow regularly: Track your monthly income and expenses carefully to spot any financial gaps early and avoid withdrawing your Bandhan Bank FD before maturity.
• Use the sweep-out facility: The Bandhan Bank sweep-out facility allows automatic transfer of funds from your fixed deposit to your savings account when needed, helping you manage liquidity without closing your FD.
• Plan Your Tenure Wisely: Use the Bandhan Bank FD interest calculator to choose a deposit tenure that aligns with your financial goals and expected cash needs. Avoid locking your funds for too long if you may need money in the near future.
• Maintain a separate emergency fund: Keep liquid savings or a money market fund for unexpected expenses. This helps ensure your Bandhan Bank FD stays untouched and continues earning interest.
• Opt for a loan against FD: In case of urgent financial needs, Bandhan Bank allows customers to take a loan of up to 90% of the FD amount, helping you avoid premature withdrawal.

Key Takeaways

Bandhan Bank FD premature withdrawal offers early access to funds but may lower your returns. The FD interest rates are revised based on the actual deposit period, and a 1% penalty is applied, reducing your final payout. To avoid this, plan your FD tenure smartly, keep an emergency fund, or use options like sweep-out deposits or loans against your FD. These steps help you manage short-term needs while your deposit continues to earn full interest.