Canara Bank FD Premature Withdrawal

Canara Premature Withdrawal FD Penalty and Interest Rules

The table below shows the Canara Bank FD premature closure charges:

Premature withdrawal rules and penalty rates of Canara Bank were last verified in September 2026.

How Interest is Recalculated on Canara Premature FD Closure

For premature closure, Canara Bank recalculates interest by applying the lower of the following two rates:

Applicable Interest Rate = Lower of (Rate applicable to the relevant amount slab and period completed − 1.00%) or (Original Deposit Rate − 1.00%)

Here,

• The applicable FD interest rate is the rate for the relevant amount slab and period run, as applicable on the date of deposit.
• The second comparison is the rate at which the deposit was accepted.
• The applicable penalty is 1.00% for eligible Domestic/NRO term deposits below ₹3 crore.

Step-by-Step Calculation Example

Assuming the applicable Canara Bank FD interest rate was taken as 6.50% for 444 days and 5.50% for 270 days less than 1 year at the time of booking, then the calculation would be as under:

The rate for the completed tenure, 5.50% p.a., is reduced by the 1.00% penalty to 4.50%

p.a. The originally contracted rate, 6.50% p.a., is reduced by the same penalty to 5.50% p.a. Canara Bank pays whichever of these two figures is lower, which in this case is 4.50% p.a. Instead of computing this manually, you can use a Canara FD Premature Withdrawal Penalty Calculator to automatically determine your exact net interest payout and penalty amount.

How to Withdraw Canara Bank FD Prematurely

Premature closure may be processed through applicable digital or branch channels, subject to the deposit type and Bank procedures. Given below are the steps to follow.

Online Channel (Net Banking / Mobile App)

Depending on the nature of the deposit and the processes applicable at the Bank, the eligible deposits may be closed using the available digital banking channels. Here’s how to close a Canara Bank FD online:

• Log in: Access net banking or the mobile app.
• Open deposits: Select Deposit Services from the dashboard.
• Select FD: Choose the fixed deposit to be closed.
• Choose closure: Select premature closure and enter the amount.
• Review payout: Check the revised interest and payout amount.
• Confirm closure: Authenticate and submit the request as required by the Bank’s applicable digital banking process.

Offline Channel (Branch Visit)

Visit a branch and follow the Bank’s applicable premature-closure procedures:

• Visit the branch: Go to the home branch.
• Carry FD receipt: Bring the original FD receipt.
• Provide ID proof: Submit valid KYC identification.
• Fill closure form: Complete the premature closure form.
• Submit documents: Hand over the form and documents for verification.
• Receive proceeds: The amount is credited to the linked savings account after processing.

Exceptions and No-Penalty Conditions

The following are the typical factors that are considered for waiving the penalty on premature withdrawal and for different FD premature withdrawal rules.

• Premature Extension: The 1.00% penalty is waived when a deposit under ₹3 crore is prematurely extended to a tenure longer than the one originally agreed.
• Bulk Deposits: The 1.00% penalty is waived for premature closure, partial withdrawal, or premature extension of Domestic/NRO callable term deposits of ₹3 crore and above. The waiver applies to deposits accepted or renewed on or after 11 June 2024.
• Tax Saver FD: Premature closure is permitted only in the event of the depositor's death. No other exemption applies to the Canara Tax Saver FD.
• Minimum Holding Period: No interest is payable on a term deposit prematurely closed or prematurely extended before completion of the 7th day from account opening.

Non-Callable FDs vs Callable FDs in Canara Bank

Callable term deposits permit premature closure or part withdrawal subject to the applicable penalty and interest-recalculation rules. Non-callable FDs are structured differently. Canara Bank offers non-callable term deposits for eligible deposits above ₹1 crore, subject to applicable product and tenure conditions. Premature withdrawal is generally not permitted for non-callable term deposits, subject to specified exceptions under the Bank’s Deposit Policy. Auto-renewal is subject to the applicable product terms.