Tripura Gramin Bank FD Premature Withdrawal

What is Tripura Gramin Bank FD Premature Withdrawal?

Tripura Gramin Bank FD premature withdrawal refers to closing of your fixed deposit before its maturity date. When you go for this facility, the bank does not pay the original Tripura Gramin Bank FD interest rate promised for the full tenure. Instead, the interest is recalculated based on how long the deposit actually remained with the bank, and a penalty is deducted. As a result, your final payout becomes lower. Thus, it is useful during emergencies, but it reduces the returns you could have earned by keeping the FD till maturity.

How to Close Tripura Gramin Bank FD Prematurely?

Tripura Gramin Bank provides online and offline premature closure of its FDs.

Online Method

To request Tripura Gramin Bank FD to withdraw the money in a premature manner online, the following steps can be followed:

• Log in to Tripura Gramin Bank’s Online Platform: Open the internet banking or mobile app of Tripura Gramin Bank.
• Go to Fixed Deposit Section: Click on the Fixed Deposit section.
• Select the FD to Prematurely Closure: Select FD that you would like to close.
• Select Premature Closure Alternative: Choose the premature close alternative.
• Authenticate the Request: Authenticate request using the required authentication.
• Receive Funds in Linked Savings Account: Once this has been done, the adjusted amount will be transferred into a linked savings account.

Offline Method

Go to the nearest branch of Tripura Gramin Bank to ask and request premature withdrawal of an FD.

• Visit the Nearest Tripura Gramin Bank Branch: Go to the closest branch of Tripura Gramin Bank.
• Carry Necessary Documents: Bring your FD receipt, ID proof, and passbook.
• Request the Premature Closure Form: Request the premature FD closing form.
• Fill Out the Required Details: Fill in all required details.
• Submit the Form and Documents for Verification: Send the form and documents to be verified.
• Receive Revised Amount in Your Savings Account: Process the revised amount to receive in your savings account.

Disadvantages of Tripura Gramin Bank FD Premature Withdrawal

Consider the following drawbacks before closing your FD early:

• Increased Interest Earnings: Premature closure leads to a decrease in the FD interest rate, depending on the real holding period. You miss the advantage of the initial contracted rate and yield less returns.
• Penalty Charges: Tripura Gramin Bank applies a penalty on premature withdrawal by reducing the applicable interest rate, which lowers the final amount you receive.
• Loss of Long-term Benefits: Fixed deposits are designed in a way that they help achieve a safe and stable growth over many years. There is a loss of compounding, and it affects your long-term savings results when you close your FD.
• Loan or Overdraft Impact: If your Tripura Gramin Bank FD is linked to an overdraft or loan facility, withdrawing prematurely may affect loan eligibility or repayment terms. Always verify the status of linked facilities before requesting closure.
• Restrictions on Pledged FDs: If your FD is pledged as security for a Tripura Gramin Bank credit card against FD, premature withdrawal may not be permitted until the dues are cleared. The bank may require a No Objection Certificate before releasing the lien.

Tax Implications on Tripura Gramin Bank FD Premature Withdrawal

In case you withdraw your Tripura Gramin Bank FD before maturity, the interest will be recalculated at a low rate depending on the actual time taken in the scheme. This interest is subject to taxation as Income from Other Sources. Under Section 194A of the Income Tax Act, TDS (Tax Deducted at Source) at 10% will be paid in case total interest is greater than ₹50,000 (₹1,00,000 for senior citizens). So, ensure you declare the updated interest during filing of the ITR.

How to Avoid Tripura Gramin Bank FD Premature Withdrawal?

Listed below are ways of accessing liquidity without prematurely withdrawing your FD:

• Choose FD Term Judiciously: Choose an FD term according to your long-term and short-term strategies. By planning your financial requirements during the different phases of life, early closure of the FD can be minimised.
• Open Multiple FDs: Do not leave a large amount of money in one FD, split it up into multiple deposits. You can withdraw money from one of the FDs and the rest can continue to earn interest.
• Maintain an Emergency Fund: Keep a portion of your savings in liquid instruments such as a savings account or recurring deposit to meet unforeseen requirements without disturbing your FD.
• Use Overdraft or Loan Against FD: You can use the Tripura Gramin Bank loan facility on the FD to access funds instead of closing it. This preserves your deposit and avoids a penalty.

Key Takeaways

The Tripura Gramin Bank FD early withdrawal allows you to access funds in case of urgent financial needs, though it reduces your final earnings. The bank recalculated the FD interest rate based on the actual tenure and applied a penalty of 1% which decreases the actual payout. In order to avoid losing your returns, you must plan your deposit tenure and close it prematurely only in case of an emergency.