Premature Withdrawal of Fixed Deposit (FD) Online - Bajaj Finance (2024)

In case of an emergency, you have the option to withdraw your fixed deposit before maturity. This is called premature withdrawal. While premature withdrawal can come in handy, if you need funds for urgent expenses, there are disadvantages such as:

If you withdraw the FD before 6 months, you won’t receive any interest amount.

If you withdraw the FD after 6 months, you might receive the lower interest amount applicable as per the fixed deposit receipt.

Check your FD details

To avoid premature withdrawal of a fixed deposit, you can opt for a shorter deposit period. This way, you don’t need to wait for a long time to receive your funds. In case you need funds for emergency expenses, you can also apply for a loan against fixed deposit.

If you’ve opted for Bajaj Finance Fixed Deposit, you can use our online FD services and apply for a loan against FD (LAFD).

Apply for LAFD

The penalty for premature withdrawal of a fixed deposit typically involves a reduction in the interest rate earned. Banks usually deduct 0.5% to 1% from the applicable interest rate for the period the deposit was held, depending on the bank’s policy.

The Reserve Bank of India's new guidelines require banks to clearly disclose the penalty for premature withdrawal at the time of deposit booking. Banks are also instructed to provide depositors with an option to withdraw a portion of the deposit while the remaining balance continues to earn interest.

Yes, you can withdraw money from a fixed deposit on the maturity date without any penalty. The principal amount and interest earned will be credited to your linked bank account, or you can choose to renew the deposit.

Yes, you can take a loan against a fixed deposit. Banks offer loans up to 90% of the deposit amount. The interest rate on such loans is usually lower than personal loans and is linked to the FD interest rate.

Breaking a term deposit before maturity typically incurs a penalty, which is a reduction in the interest rate by 0.5% to 1%, depending on the bank's policy. Additionally, some banks may charge a processing fee for the premature withdrawal.