A fixed deposit scheme guarantees a fixed interest-earning which is offered by the bank or financial company at the time of investment. The interest rate will be informed to you in advance as these rates vary with tenor and type of FD you are investing.
However, some investors tend to withdraw their FD before maturity due to some emergency or financial crisis. Most of the banks allow you to withdraw your FD before maturity, but that also means that you will not get the returns that were promised to you earlier.
These things can happen when you are opting for a premature withdrawal:
Let us suppose that you have a Fixed Deposit with one year lock-in period but want to withdraw it after completion of 6 months. For that, you will have to submit a withdrawal application to your financier, and you might be charged with a penalty if the application gets accepted.
Usually, 0.5 to 1 percent of the interest rate which is applicable for the duration (6 months in this case) will be charged as a penalty.
Some banks deny premature withdrawal especially in the cases where the minimum lock-in period is not achieved. Also, if you have invested in a tax-saving fixed deposit which has a lock-in period of 5 years, then you will not be able to withdraw your FD before maturity.
How will the Interest Rates be Calculated when you Withdraw an FD before Maturity?
Let us suppose that you have invested in an FD for five years. However, if you are withdrawing it after completion of one year due to some reason, then the interest earnings will be calculated as per the new time frame, i.e ., one year. Therefore, you will lose some percentage of your interest earnings with or without penalty charges. The decision to charge a penalty depends completely on your financier.
Bajaj Finance offers fixed deposits with tenors ranging from 12 to 60 months. Therefore, you can choose the lock-in period as per your convenience. Moreover, interest rates of up to 8.75 percent can be availed by investing in these fixed deposits.
Accessing Money from Fixed Deposits without Losing Interest
Usually, FDs which have a longer lock-in period offer better interest rates than the FDs that have shorter lock-in periods. The interest rates offered on non-cumulative FDs are naturally less than the interest earnings offered on cumulative FDs.
Your interest earnings also depend on the type of interest payout you have chosen. A bank or financial company will offer higher interest rates for non-cumulative FD with yearly payout than the same non-cumulative FD with a monthly payout. As a result, you can choose a cumulative FD or a non-cumulative FD with lesser payout frequency to avoid the loss of interest earnings.
With Bajaj Finance FD, you can choose a cumulative or non-cumulative FD according to your convenience. Moreover, you can also choose monthly, quarterly, six-monthly or yearly interest payouts as per your financial requirements.
It is a good practice to wait until your FD matures because only then you can get the maximum benefit from the interest earnings. Some NFBCs offer easy loans on your FDs so that you need not break your FD before maturity. By availing a loan at low-interest rates, you can earn surplus returns from your FDs without losing interest. These were some of the methods by which you can gain maximum returns from your fixed deposits. You can predict your earnings in advance with online fixed deposit interest calculator. It’s easy to calculate your total earnings as per the tenor and the principal amount of your FD. With CRISIL and ICRA ratings, your FD investments are safe with Bajaj Finance, and senior citizens can avail interest rates up to 9.10 percent. With so many advantages, you need not looking anywhere else if you are searching for a risk-free investment scheme with surplus returns.