Bank of India FD Premature Withdrawal

Bank of India FD Premature Withdrawal Penalty Charges

These rates apply to Domestic and NRO term deposits, as per Bank of India’s published penalty schedule. NRE deposits follow a separate rule, outlined below.

*Bank of India FD premature closure rules and penalty rates updated as per prevailing guidelines as of 3rd September 2026.

How Interest Is Recalculated on Premature FD Closure

Bank of India deducts penalty directly from the rate applicable to the period the deposit actually remained with the bank. This differs from a few other public sector banks: Bank of India's own published schedule does not describe a separate comparison against the originally contracted rate. It simply states the deduction that applies once the deposit is closed prematurely.

Applicable Interest Rate = Lower of the rate applicable for the actual period held or the contracted rate − applicable penalty (0.50% or 1.00%)

Step-by-Step Calculation Example

Take a domestic Bank of India FD of ₹3 lakh, booked under tenure of 270 days to less than 1 Year at 5.50% p.a., and closed after completing 200 days.

The applicable rate for the actual 200-day holding period is reduced by the 0.50% penalty, since the deposit falls under ₹5 lakh and withdrawn before completing 12 months. Bank of India pays 5.00% p.a. If the deposit had completed more than 12 months before closure, no penalty would apply, and interest would be paid at the applicable Bank of India FD rate for the full period.

How to Close a Bank of India FD Prematurely

There are two methods that are available for every bank’s FD premature withdrawal. Bank of India’s follows offline branch procedure, while the online process is based on the standard net banking or through mobile app.

Online Channel (Net Banking / Mobile App)

You can request premature closure of your Bank of India Fixed Deposit online with these steps:

• Log in: Access Bank of India's net banking portal or Star Connect mobile app using your credentials.

• Navigate to deposits: Go to the Term Deposit or Fixed Deposit section of the dashboard.

• Select the FD: Choose the specific deposit account you want to close before maturity.

• Request premature closure: Select the closure option and confirm the amount to be withdrawn.

• Review recalculated interest: Check the revised payout figure before confirming the transaction.

• Authenticate and submit: Confirm using OTP, and proceeds are credited to your linked account.

Offline Channel (Branch Visit)

You can also request premature closure of your Bank of India Fixed Deposit by visiting the branch and following these steps:

• Visit the branch: Walk into your Bank of India branch and inform an official of the closure.

• Collect the termination form: A bank official will provide the early termination form to complete.

• Fill in the details: Ensure all fields on the form are filled in correctly.

• Complete KYC: Provide fresh KYC details if requested by the branch official.

• Submit documents: Hand over the original FD certificate along with a valid ID proof.

• Receive proceeds: Once validated, the principal and accrued interest, after any deduction, are credited.

Exceptions and No-Penalty Conditions

A handful of scenarios sit outside Bank of India's standard penalty structure, though not all are confirmed from the bank's own published page.

• Premature Renewal: No penalty is charged when a term deposit is prematurely closed for renewal into another Bank of India term deposit, provided the renewed deposit remains with the bank for a period longer than the remaining tenure of the original deposit.

• Death of the Depositor: No premature withdrawal penalty is charged when the term deposit is closed before maturity due to the depositor’s death. The eligible proceeds are paid to the nominee or legal heir as per the applicable bank procedures.

• NRE Deposits Under 12 Months: No interest at all is payable if an NRE term deposit is closed before completing the minimum stipulated maturity, currently 12 months. Since no interest exists to reduce, no separate penalty applies in this case.

• Tax Saving FD: The Star Sunidhi Tax Saving Scheme carries a lock-in of 5 to 10 years. Premature withdrawal is not permitted, based on standard tax-saver terms reported across sources rather than a page found directly on Bank of India's site.

Non-Withdrawable Deposits vs Withdrawable Deposits at Bank of India

Bank of India offers both withdrawable and non-withdrawable term deposits, subject to applicable terms. Withdrawable deposits can be closed before maturity, with the applicable premature-withdrawal penalty. Non-withdrawable deposits generally cannot be prematurely closed at the depositor’s request, except in specified circumstances such as death, bankruptcy or regulatory directions.