Dhanlaxmi Bank FD Premature Withdrawal

What is Dhanlaxmi Bank FD Premature Withdrawal?

Premature withdrawal of Dhanlaxmi Bank FD is closing your fixed deposit before the maturity date. This provides flexibility for emergencies, such as emergency medical needs or out-of-pocket expenses. But this option is subject to some charges and revised Dhanlaxmi Bank FD interest rates. If the withdrawal occurs within the first 7 days, no interest is paid. The amount and duration of the FD have an impact on the penalty and interest. Before applying, you should also keep in mind that the bank may allow premature withdrawal as per its own discretion. Permission will be granted as per the bank's policies.

How to Close Dhanlaxmi Bank FD Prematurely?

You can start a premature withdrawal of your Dhanlaxmi Bank FD online and offline.

Online Method

Internet Banking or Mobile App Dhanlaxmi Bank allows you to request a premature withdrawal of your Fixed Deposit.

• Mobile Application or Internet Banking: Launch the Dhanlaxmi Bank mobile application or NetBanking and log in.
• Click on FD: On the website, visit the Fixed Deposits.
• Select FD Type: Choose the FD on which you would like to withdraw.
• Select Close or Premature: Tap on Close Fixed Deposit or tap on Premature Withdrawal.
• Select the Credited Amount: Choose the account with which the withdrawn amount will be credited.
• Enter the Password: Enter your MPIN or transaction password and make the request.

Offline Method

To close your FD offline, follow these steps at any Dhanlaxmi Bank branch:

• Visit Nearest Bank Branch: Go to the Dhanlaxmi Bank branch closest during working hours.
• Take Necessary Documents: Carry your FD receipt, I.D. proof, and passbook.
• Complete the Form: Fill in the premature FD withdrawal form.
• Submit the Form: Send the documents and forms to the bank representative.
• Verification and Processing: The bank will check your details, and the request will be processed.
• Amount Credit: The money will be deposited in your savings account within 1-2 working days.

Disadvantages of Dhanlaxmi Bank FD Premature Withdrawal

The following are some of the drawbacks that you must weigh before deciding to make an emergency withdrawal in Dhanlaxmi Bank FD:

• Less Interest Earnings: When you withdraw an FD early, you will receive less interest, as the best rates are provided on the entire term deposit. You lose the compounding benefits as well if the deposit reaches maturity.
• Impact on Financial Planning: Fixed deposits can be an essential part of long-term financial goals. Premature withdrawal could compromise your investment plan or may end up delaying your financial goals.
• Impact on Credit Card: When you pledge the Dhanlaxmi Bank FD to a Dhanlaxmi Bank credit card against FD, you cannot withdraw the FD early, as all outstanding payments will be paid. The bank may request a no-objection certificate of full repayment to grant access to the FD.
• No Interest for Early Withdrawal within 7 Days: If you withdraw your FD within the first 7 days, no interest is paid on the deposit, leaving you with just the principal amount.

Tax Implications on Dhanlaxmi Bank FD Premature Withdrawal

The calculated interest on the prematurely withdrawn FD will be recalculated at a lower rate on the period during which the money had been held in the FD. This interest has to be taxable as Income from Other Sources and TDS as per Section 194A of the Income Tax Act. TDS charged is 10% on the interest amount earned when the total amount of interest income is more than ₹50,000 in a financial year for general citizens and ₹1,00,000 in the case of senior citizens. Always remember to declare the updated interest amount when you are filing your Income Tax Return (ITR).

How to Avoid Dhanlaxmi Bank FD Premature Withdrawal?

The following are some of the strategies you should use to prevent early withdrawal of your FD:

• Choose the tenure of your FD Wisely: Use the FD Calculator of Dhanlaxmi Bank to decide on the tenure of your FD. By doing so, you can make the correct estimation of returns and not withdraw money at the wrong time.
• Open Multiple FDs: Divide your amount of FD into several deposits with different maturity dates. This will provide you with the flexibility and the ability to only withdraw a portion of the FD in case of necessity without accessing the whole.
• Have an Emergency fund: Have a separate emergency fund in a savings account or liquid funds to meet emergency expenses without necessarily having to withdraw from the FD prematurely.
• Apply Sweep-in Options: Dhanlaxmi Bank provides the sweep-in option, whereby the funds are automatically transferred out of the FD to your savings account as and when required. This eliminates the necessity of early withdrawal.
• Credit Card Against FD: If you want to withdraw your FD, consider a loan against your FD or just use it as collateral for a credit card. This will allow you to withdraw money and still earn interest on your FD.

Key Takeaways

Dhanlaxmi Bank FD premature withdrawal provides an option of accessing money in times of emergency, but is subject to a penalty and lower FD interest rates. The interest charged is 0.50% on deposits with a limit of less than 5 lakh rupees and 1% on deposits amounting to 5 lakh rupees and above. The interest is also recalculated according to the time in which the money was held, leading to low returns. To escape such penalties and lower interests, it is better to think well before committing your FD tenure, keep an emergency fund, or consider other options such as sweep-in facilities or a loan on FD.