Tamilnad Mercantile Bank FD Premature Withdrawal

What is Tamilnad Mercantile Bank FD Premature Withdrawal?

Tamilnad Mercantile Bank FD premature withdrawal allows you to close your fixed deposit before the maturity date. Under the facility, the bank recalculates your returns based on the actual period the money was kept in the FD, which may reduce your earnings compared to the original Tamilnad Mercantile Bank FD interest rates. This is why customers may receive a lower payout than expected. Premature withdrawal is generally not allowed for Tax-Saving FDs, as these deposits have a fixed five-year lock-in period.

How to Close Tamilnad Mercantile Bank FD Prematurely?

You can also request Tamilnad Mercantile Bank FD premature withdrawal online or offline at your convenience.

Online Method

TMB Internet Banking can make it easy to close your Fixed Deposit in case you want an online solution.

• Sign In to NetBanking Portal: Sign in to NetBanking portal of TMB.
• Go to the Deposits Section: Go to the Deposits section.
• Select the FD to Close: Choose the FD to be closed.
• Select Premature Closure: Select the option of premature closure.
• Choose the Credit Account: Choose the credit account.
• Authorise and Place the Request: Authorise the request and place the request.

Offline Method

To close your FD, you can go to one of the branches of the Tamilnad Mercantile Bank and take the following steps:

• Branch Visit: Go to the nearest TMB branch.
• Carry the Documents: Carry the FD receipt and ID proofs.
• Premature Withdrawal Form: As the premature withdrawal form.
• Fill and Sign the Form: Fill in and sign the form.
• Submit the Form and Documents: Attach the relevant documents and submit the form.
• Receive the Amount with Deductions: Get the amount credited with deductions.

Disadvantages of Tamilnad Mercantile Bank FD Premature Withdrawal

The key drawbacks of using TMB FD to take premature withdrawal are the following:

• Reduced Interest Earnings: The FD will be closed prior to the maturity date, and fewer earnings accrued because the end payout will be calculated with a reduced tenure.
• Limit on credit card/loan against FD: In case your FD has been secured against Tamilnad Mercantile Bank credit card against FD, you are not allowed to close your FD until all outstanding debts are paid off. The bank might insist on No Objection Certificate (NOC) that the repayment is made. The fixed deposit is locked in as security and cannot be withdrawn until that time.
• Implications on Financial Objectives: The implications on your financial objectives could be that early closure would impact the financial objectives in the long run. Purchasing a house, retiring, and even financing your education are some of the key things that can be done with your FD corpus.
• Processing Restrictions: When the FD is collateralised by a loan or overdraft, then early termination can either impact loan terms or require prior modification of the FD before it is liquidated.

Tax Implications on Tamilnad Mercantile Bank FD Premature Withdrawal

When you close your Fixed Deposit (FD) before maturity, interest will be recalculated based on the tenure for which you deposited the money with the bank. This interest is regarded as a part of your income, and it is taxed based on your tax bracket. Under Section 194A, if the total interest earned on all your TMB fixed deposits in a financial year exceeds ₹50,000 (₹1,00,000 for senior citizens), the bank will deduct Tax Deducted at Source (TDS) at 10%.

How to Avoid Tamilnad Mercantile Bank FD Premature Withdrawal?

Some of the effective solutions to avoid Tamilnad Mercantile Bank FD premature withdrawal are listed below:

• Divide your Money into FDs: Divide your money into smaller deposits. When you require liquidity, you can only close one FD and not the entire amount.
• Always Plan Your Tenure: Choose the deposit period that suits your financial target to avoid the premature withdrawal of funds and interest.
• Maintain Emergency Fund: Have an Emergency fund in a savings account or low-risk investments so that you do not have to close your FD in case of a financial crisis.
• Consider Loan Against FD: TMB provides loans against the fixed deposits. Lending at the expense of your FD will enable you to cover short-term demands without defaulting on the deposit.

Key Takeaways

Tamilnad Mercantile Bank FD premature withdrawal has a direct impact on your earnings. The bank will charge a 1% penalty upon early closure, and this will decrease the FD interest rates, making the final value you get less. In case the fixed deposit is closed in the period of 14 days after its opening or renewing, no interest is paid, and such withdrawals are very disadvantageous. Knowing these rules and planning your deposits smartly can help you save on unnecessary losses and better use your fixed deposits.