In case of emergency, customers break their FD before maturity to require money, then they have to pay a fixed amount to the bank as a penalty.
new Delhi. The private sector bank Axis Bank has given great relief to its customers. Recently, the bank has announced no penalty for premature closure on new retail term deposits booked for 2 years or more after 15 December 2020 or beyond. This discount will be available in the new FD and RD.
The bank said that to avail this rebate to the customer, they have to keep their FD or RD operational for 15 months. If customers break their FD or RD after the completion of 15 months, then they will not have to pay any kind of pre-maturity penalty. If the bank’s FD and RD customers make the first withdrawal equal to 25 percent of the principal of the deposit scheme, then no penalty will be charged from them. In this news we will talk Usually, how is the penalty imposed for breaking a fixed deposit before the maturity date.
In case of emergency, customers break their FD ahead of time, they have to pay a fixed amount to the bank as a penalty. In traditional FDs, a penalty of 1 per cent is generally applicable on the interest amount on premature bidroll. Example: 5 years maturity, but FD investment is to be broken in 1 year : Rs 1 lakh
Period of FD: 5 years
Interest on 5 years: 7 percent
Interest on 1 year: 6 percent
If penalty is 1 percent and FDs break after 1 year, then the effective interest rate will be considered 6-1 = 5 percent.