Indian Bank FD Premature Withdrawal

Indian Bank FD Foreclosure Charges

These charges apply to term deposits opened or renewed on or after 27 February 2020. Indian Bank follows a single 181-day threshold, with the waiver applicable only to deposits of up to ₹5 lakh.

*Premature withdrawal rules and penalty rates updated as per prevailing Indian Bank guidelines as of October 2026.

How Interest Is Recalculated on Premature FD Closure

Indian Bank calculates foreclosure interest using the card rate applicable to the actual deposit period as on the booking date. The 1.00% deduction depends on whether the deposit exceeds ₹5 lakh or is closed before completing 181 days. The originally contracted rate plays no separate role in the calculation.

Eligible Rate = Card Rate for Period Run (as on date of deposit) − Foreclosure Charge (0.00% or 1.00%, per the table above)

Step-by-Step Calculation Example

Consider a ₹2,00,000 Indian Bank deposit, under the ₹5 lakh threshold, booked under the 2 years to less than 3 years tenure at 6.15% p.a., and foreclosed after 150 days, short of the 181-day cutoff that would have waived the charge entirely.

The Indian Bank FD rate for 121 days to 180 days is 3.85% p.a., because foreclosure falls before 181 days, the 1.00% charge applies, bringing the eligible rate down to 2.85% p.a.

In case the amount is kept for 200 days, which is within the range of 181 days but less than 9 months, there will be no foreclosure fee, and the interest will be paid at the full rate of 4.50% p.a. for the period kept. You can also calculate your return in the Indian Bank premature withdrawal FD calculator.

How to Close an Indian Bank FD Prematurely

Indian Bank provides two options for premature closure online and offline, with a defined process for each. The steps below follow the standard NetBanking and IndSMART process for Indian Bank and should be verified against the bank’s latest digital banking instructions before publication.

Online Channel (NetBanking / IndSMART App)

You can request premature closure of your Indian Bank Fixed Deposit through NetBanking or the IndSMART app by following these steps:

• Log in: Access Indian Bank NetBanking, or open the IndSMART app using your MPIN or fingerprint.

• Navigate to deposits: Go to My Account, then select Deposit Account from the menu.

• Select the FD: Tap the specific FD account you want to close early.

• Choose closure: Select Premature Closure or the Close Deposit option for that account.

• Choose the credit account: Select the savings account where the proceeds should be paid.

• Confirm the request: Enter your transaction password or PIN and the OTP received on your mobile.

Offline Channel (Branch Visit)

You can also request premature closure of your Indian Bank Fixed Deposit by visiting a branch and completing the following steps:

• Visit the branch: Visit the nearest branch of Indian Bank with all your account particulars.

• Carry ID proof: Provide ID proof like your Aadhaar card or PAN card.

• Fill the closure form: Fill the foreclosure form available at the branch counter.

• Submit the FD receipt: Submit the original FD receipt at the time of booking.

• Complete verification: Your documents will be verified by the branch authorities.

• Receive credited proceeds: The amount eligible for foreclosure is credited to your bank account.

Exceptions and No-Charge Conditions

Indian Bank specifies several categories that are exempt from the standard foreclosure charge.

• The 181-Day Waiver: Deposits up to ₹5 lakh that remain with the bank for at least 181 days pay no foreclosure charge at all, regardless of how much shorter than the original tenure that period turns out to be.

• Institutional Deposits: No foreclosure charge applies to deposits placed by Corporate or Government departments, quasi-government bodies, institutions, or non-profit organisations, where the deposit was placed against a quotation submitted by the bank.

• Staff and Ex-Staff Deposits: No foreclosure charge applies to deposits held in the name of staff, ex-staff, or ex-staff who also qualify as senior citizens.

• NRE Conversion to RFC: No penalty is charged when an NRE term deposit is closed prematurely specifically to convert into a Resident Foreign Currency account.

• FCNR(B) Deposits: These follow a different mechanism entirely. Interest is paid at whichever is lower between the rate for the period actually run and the original contracted FCNR rates, with no separate percentage foreclosure charge deducted from either figure.

Callable vs Non-Callable Bulk Deposits at Indian Bank

Indian Bank’s bulk deposit table for ₹3 crore to ₹5 crore lists separate rates for Callable and Non-Callable deposits. Non-Callable deposits generally offer slightly higher rates across most tenure bands. For deposits of ₹5 crore and above, the bank may disallow premature withdrawal entirely, subject to the applicable terms.