SBI FD Premature Closure - Charges & Process

Let’s understand the charges, process, impact on interest, and tax implications of closing an FD prematurely with SBI.

What Is the Premature Closure of FD SBI?

Premature FD closure in SBI refers to the situation where the fixed deposit account holder requests to terminate the deposit before the completion of its originally agreed-upon maturity period. This could be in light of some urgent financial need, better investment choices, or due to personal reasons.

SBI Premature FD Closure Charges, Explained

Any premature withdrawal of an FD will entail the application of a penalty on the SBI FD rates. Hence, the interest earned shall become less than that contracted initially.

The premature FD closure charges SBI are as follows:

• For Term Deposit up to ₹5.00 lakh, the penalty for premature withdrawal will be 0.50% (all tenors).

• For Term Deposits above ₹5.00 lakh, the applicable penalty will be 1.00% (all tenors).

Example:

If you booked an FD for 2 years at 6.50% interest but closed it after 1 year when the applicable interest rate is 6.00%, and if a 0.50% penalty applies, your effective interest rate becomes 5.50%.

When Are No Charges Applied?

SBI waives premature FD closure charges under the following conditions:

• If the deposit amount is below ₹5 lakh and the FD is held for less than 1 year.

• If the closure is because of the death of the depositor.

• If the deposit is in the name of senior citizens, then some relaxed rates or waivers may be given, depending on the scheme.

How to Close Your SBI FD Prematurely?

There are two ways you can close your SBI FD prematurely, which can be done both online and offline:

1. Online FD Closure (through SBI Netbanking or YONO App)

   • Log into your SBI NetBanking or YONO SBI app.

   • Go to Fixed Deposit.

   • In the Fixed Deposit screen, go to Close FD prematurely.

   • Select the FD account to be closed.

   • Confirm the request for closure.

2. Offline FD Closure

   • Visit the nearest SBI branch.

   • Carry your FD receipt, identity proof (like Aadhaar or PAN), and a duly filled FD closure form.

   • Submit your request for a premature withdrawal.

Tax Implications of Premature FD Closure

Interest earned on an FD is taxed, even if the FD is closed prematurely. Here are the main things you need to know:

1. TDS (Tax Deducted at Source):

   • When the total FD interest income from any bank is more than ₹40,000 (₹50,000 for senior citizens) in any financial year, SBI deducts TDS at a rate of 10%.

   • If one does not provide their PAN, then TDS is deducted at a higher rate of 20%.

   • TDS is deducted even if the FD is prematurely closed.

2. Section 80C of the Income Tax Act:

   • Tax-saving FDs (with a lock-in of 5 years) are deductible under Section 80C to the extent of ₹1.5 lakh.

   • If a tax-saving FD is prematurely withdrawn, then it ceases to qualify for deduction under Section 80C.

   • Also, all interest on such FDs shall be included in taxable income.

Points to Consider Before Premature Closure

Here are some tips to avoid high premature FD closure charges in SBI:

1. Compare penalty vs loan option:

   If you really need funds on an urgent basis, consider taking a loan against your FD instead of closing it prematurely. SBI offers loans up to 90% of the FD amount at attractive rates.

2. Split your FDs:

   Instead of one big FD, split it into smaller ones of different tenures. This would allow you some flexibility if you needed to break one without disturbing the rest.

3. Check reinvestment options:

   Sometimes, breaking and reinvesting at a higher rate (if market rates rise) may still be worth it after paying the penalty.

Key Takeaway

Premature closure of FD SBI is permitted but attracts penalties on interest and certain tax implications. One should know the premature FD closure charges SBI levies on the deposits as on their amount or tenure. Planning your investments carefully can help to avert these losses, as SBI does provide a loan/overdraft facility against FDs and may offer sweep-in facilities or alternatives for partial withdrawal during emergencies.

Bank FD Interest Rates

Bank FD Calculator

NRI-NRE FD Rates

Allahabad Bank FD Rates

Andhara Bank FD Rates

Assam Gramin Vikash Bank FD Rates

AU Small Finance Bank FD Rates

Axis Bank FD Rates

Bajaj Finance FD Rates

Bandhan Bank FD Rates

Bangiya Gramin Vikash Bank FD Rates

Bank of Baroda FD Rates

Bank of Ceylon FD Rates

Bank of Maharashtra FD Rates

Baroda Gujarat Gramin Bank FD Interest Rates

BOI FD Interest Rates

Canara Bank FD Rates

Capital Small Finance Bank FD Rates

Central Bank of India FD Rates

Citi Bank FD Rates

City Union Bank FD Rates

Corporation Bank FD Rates

Dakshin Bihar Gramin Bank FD Rates

DBS Bank FD Rates

Dena Bank FD Rates

Dhanlaxmi Bank FD Rates

Equitas Bank FD Rates

ESAF Small Finance Bank FD Rates

HDFC FD Interest Rates

HSBC FD Rates

ICICI Bank FD Rates

IDBI Bank FD Rates

IDFC Bank FD Rates

Indian Bank FD Rates

Indian Overseas Bank FD Rates

IndusInd Bank FD Rates

Jana Small Finance Bank FD Rates

Karnataka Bank FD Rates

Kerala Bank FD Interest Rates

Kotak FD Rates

Lakshmi Vilas Bank FD Rates

Muthoot Capital FD Rates

Nainital Bank FD Rates

Odisha Gramya Bank FD Rates

Paschim Banga Bank FD Rates

Paytm FD Rates

PNB FD Interest Rates

Prathama UP Gramin Bank FD Rates

RBL Bank FD Rates

Saurashtra Gramin Bank FD Interest Rates

SBI FD Interest Rates

Shriram Finance FD Rates

State Bank of Hyderabad FD Rates

State Bank of Mysore FD Rates

State Bank of Travancore FD Rates

Syndicate Bank FD Rates

Tamil Nadu Grama Bank FD Interest Rates

Telangana Grameena Bank FD Rates

Tripura Gramin Bank FD Interest Rates

UCO Bank FD Rates

ujjivan small finance bank fd rates

Union Bank FD Rates

Uttar Bihar Gramin Bank FD Rates

Uttarakhand Gramin Bank FD Interest Rates

Vijaya Bank FD Rates

Yes Bank FD Rates

Expand

Allahabad Bank FD Calculator

Andhra Bank FD Calculator

AU Bank FD Calculator

Axis Bank FD Calculator

Bajaj Finance FD Calculator

Bandhan Bank FD Calculator

Bank of Baroda FD Calculator

Bank of India FD Calculator

Bank of Maharashtra FD Calculator

Canara Bank FD Calculator

Central Bank FD Calculator

Corporation Bank FD Calculator

Equitas Small Finance Bank FD Calculator

HDFC Bank FD Calculator

ICICI Bank FD Calculator

IDBI Bank FD Calculator

IDFC Bank FD Calculator

Indian Bank FD Calculator

Indian Overseas Bank FD Calculator

IndusInd Bank FD Calculator

Karnataka Bank FD Calculator

Karur Vysya Bank FD Calculator

Kotak Bank FD Calculator

Mahindra Finance FD Calculator

OBC Bank FD Calculator

Odisha Gramya Bank FD Calculator

PNB Bank FD Calculator

SBI FD Calculator

Shriram Finance FD Calculator

Syndicate Bank FD Calculator

Tripura Gramin Bank FD Calculator

UCO Bank FD Calculator

Union Bank FD Calculator

Yes Bank FD Calculator

Expand

HDFC NRE FD Rates

Maybank Malaysia FD Rates

SBI NRI FD Rates

Axis NRI FD Rates

Maybank Singapore FD Rates

Yes Bank NRI FD Rates