How to Fill an SBI Premature FD Withdrawal Form

What Is Premature Withdrawal of SBI Fixed Deposit?

Premature withdrawal means the closing of an FD before the maturity of its original term. For example you opened an FD for 5 years but wished to close it short of the two-year maturity period; that would be a premature closure of the FD SBI. While the bank gives the option to close prematurely, usually a penalty is imposed, resulting in reduced SBI FD interest rates.

When Can You Apply for Premature Closure?

You can apply for premature withdrawal of your SBI FD any day before its maturity, for whatever reason: personal requirements, emergencies, whatever it may be. However, SBI does not permit premature closure of some fixed deposits, such as tax-saving fixed deposits, before 5 years, as these are locked in under Section 80C of the Income Tax Act.

What Is an SBI Premature FD Withdrawal Form?

To get an FD prematurely closed, you will need to submit a duly filled SBI premature withdrawal form. This form is available at any SBI branch and is also downloadable from the official SBI website. It is a formal request from a customer to close the FD before maturity and credit the funds to an account specified by him or her.

How to Fill the SBI Premature FD Withdrawal Form

Here is a step-by-step guide to fill out an SBI premature FD withdrawal form.

1. Personal Details:

   Enter your full name, the customer ID, and the FD account number.

2. FD Details:

   Enter details of the deposit amount, date of opening, and duration of the FD.

3. Reason for Closure (Optional):

   You may be asked to mention a reason, though it is not mandatory for most FD types.

4. Mode of Payment:

   Mention here where to credit the amount, either the linked savings/current account or any other.

5. Signatures:

   Signatures of all holders would be required in case of joint FDs.

6. Attach Documents:

   Submit a copy of proof of your identity and a cancelled cheque, if required.

Where to Submit the Form?

The form, once filled, can be submitted either:

1. At your home branch:

   Visit the branch where the FD was opened.

2. Via Online SBI:

   For digital FDs, premature withdrawal can be executed by way of internet banking or via the YONO App without the use of a physical form.

3. By Post

   (in rare cases): A few branches may decide to entertain mailed forms, subject to proper verification.

Tax Implications of Premature FD Closure

1. TDS (Tax Deducted at Source)

   • SBI deducts 10% TDS if interest earned on FDs exceeds ₹40,000 (₹50,000 in case of senior citizens) in a financial year.

   • TDS rate considered will be 20% if the PAN has not been updated by the bank.

2. Section 80C Deductions

   • If for a tax-saving FD you had claimed a deduction under Section 80C and broke the FD before 5 years, the benefit accrued to you will be reversed.

   • Banks may also cut some interest as a penalty for breaking the FD early, so you’ll end up getting less money than expected.

What Documents Do I Need Along With the SBI Form?

While you attach the SBI premature FD withdrawal form, you must attach the following:

• Proof of identity (at least one copy of an identity proof such as an Aadhaar card, PAN, or Passport)

• A cancelled cheque of the linked account (if the payment is made to a third-party account)

• FD receipt or certificate, if issued at the time of FD creation

Can I Close My SBI FD Online?

Yes, there is an online premature closure of FD SBI, which can be done via:

1. SBI Internet Banking:

   Log in, navigate to the 'Fixed Deposit' section, and select the premature closure option.

2. YONO App:

   The procedure is similar; select the FD, tap on 'Close FD', and confirm.

Things to Keep in Mind Before Premature FD Closure

1. Interest Loss:

   You will receive a lower interest rate than the agreed interest rate, plus a penalty.

2. TDS Impact:

   Your interest is taxable, and they can deduct TDS.

3. Tax Benefits May Be Reversed:

   Especially for tax-saving FDs.

4. Online vs Offline:

   Online FDs can easily be closed without any paperwork. Offline FDs require the form along with documents.

Key Takeaway

Premature closure of the FD SBI account is simple but involves penalties and tax considerations. Whether online or offline, make sure you have duly considered the implications of reduced interest rate and tax implications associated with premature withdrawal from SBI before submitting the application for premature withdrawal of SBI FD.