ICICI FD Premature Withdrawal Penalty Calculator

Penalty for Premature Withdrawal 

1. Liquidity with a Cost:

   ICICI FD schemes are liquid, allowing full or partial withdrawal to meet urgent financial needs, but this flexibility incurs a mandatory penalty.

2. Penalty Deduction:

   The penalty percentage is deducted from the applicable interest rate for the period the deposit was actually held (not the original contracted rate).

3. Lower Final Return:

   This deduction results in you earning considerably less interest than the original rate on the withdrawn amount.

4. 7-Day Rule:

   If the deposit is withdrawn within the first 7 days, no interest is paid at all.

5. Deposit Amount Matters:

   The penalty rate varies based on both the amount deposited (below or above ₹5 Crore) and the duration of the original tenure.

ICICI Interest Payment Mechanism (Premature Withdrawal)

1. No Original Rate: 

   You do not receive the original contracted ICICI FD interest rate if the FD is withdrawn early.

2. Two-Step Calculation: 

   The final interest is calculated in two mandatory steps:

   • Base Rate: The bank first determines the interest rate that was applicable on the date of FD booking for the actual period your money stayed with the bank.
   • Penalty Deduction: The applicable penalty (e.g., 0.50% or 1%) is then subtracted from this new Base Rate.

3. Final Formula Concept: 

   Your final interest rate is essentially: (Applicable Rate for Actual Tenure) - (Penalty)

4. 7-Day Loss:

   No interest is payable if the FD is withdrawn within the first 7 days of the deposit date.

5. Death Exception: 

   Premature withdrawal following the death of the depositor is generally allowed without any penalty charge.

ICICI Bank FD Premature Withdrawal Penalty Calculator

• Consumers find it difficult to assess the amount of money they would lose if they choose premature withdrawal. They find it difficult to trade off between the urgent financial needs and potential money lost due to premature withdrawal. To help the consumers in this case, ICICI bank has developed an online ICICI FD Premature Withdrawal Penalty calculator. The ICICI FD Premature Withdrawal Penalty Calculator shows the money lost yearly due to any premature withdrawal. 

• To access the Premature Withdrawal Penalty Calculator, the consumers must visit the website of ICICI and find the FD closure calculator under the calculator segment. The Premature Withdrawal Penalty Calculator calculates the amount of return that can be made available for normal customers and senior citizen customers.

• The users must provide the FD creation date, deposit amount, and penalty rate as applicable. The maturity date shows the date current date. Therefore, Premature Withdrawal Penalty Calculator helps to assume the fixed deposit value as per the current date. Consumers can choose different variables of the inputs mentioned above to assess the effectiveness of their decision for premature withdrawal.

• The output data is shown every year the interest will be earned. The users can choose to see the comparative output through table mode or graphical mode. The online calculator also includes the maturity details of the scheme in terms of rate of interest, maturity amount, interest amount, and tenure in the output section. Therefore, the ICICI FD Premature Withdrawal Penalty Calculator offers an overall assessment of the decision to withdraw the FD scheme prematurely.

Calculation of Premature Withdrawal Penalty 

As per the calculation shown in the calculator, an example of a premature withdrawal penalty has been put forth below.

Example:

The person invested INR 1,00,000 in ICICI fixed deposit scheme on 5th May 2013. The ICICI Fixed Deposit Scheme is about to mature on 5th May 2023. It was invested for ten years.

As per the ICICI FD premature withdrawal calculator, the maturity value of the scheme becomes INR 21,40,776. It offers an interest rate of 8.5%. Here, no penalty is added. Since the person does not want to withdraw the money prematurely, the total interest is paid to date INR 11,40,776.

However, if the person wants to withdraw the money prematurely, the person will pay a withdrawal penalty of 1%. So, the interest rate will be 7.5%. The person will earn total interest to date INR 9,59,015. Since the maturity value of the scheme will be INR 19, 59,015. 

Therefore, a small penalty of 1% can make a huge difference in the amount of interest earned if the fixed deposit amount is high. Therefore, it will not be justifiable to withdraw the scheme prematurely after investing it for a long time to allow it to mature. 

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