RBI has been changing basis points starting last july as a result of which interest rate fluctuations have been wild. Be it resident account, NRO, NRE, FCR deposit most of us keep on changing it over a period of time. As most of us don't really pay attention on how much we will be getting upon closure of fixed deposit on a premature basis (before maturity period), this post will be an eyeopener on whether it is really needed to make the FD switch to take advantage of new interest rate
Some facts on premature closure of fixed deposit are as follows
1) Fixed deposit is a fixed contract between bank and depositor
2) The tenure is equal to number of days for which you have maintained account with the bank
3) Interest rate chart at the time of opening deposit should be considered while calculating the interest of premature deposits that are closed. Make a note here - It is old interest rate chart and not the current one. So, if current interest is more for same tenure you can't take advantage of it. As well as if it is less you don't loose any money. It is a contract established at the time of opening and it is fixed except for the fact that it changes with tenure
4) Premature penalty of 0.50% to 1% can be waived by bank at will. Don;t ignore to ask your bank officials on this. This is inherent and most of us miss to make use of it
Some facts on premature closure of fixed deposit are as follows
1) Fixed deposit is a fixed contract between bank and depositor
2) The tenure is equal to number of days for which you have maintained account with the bank
3) Interest rate chart at the time of opening deposit should be considered while calculating the interest of premature deposits that are closed. Make a note here - It is old interest rate chart and not the current one. So, if current interest is more for same tenure you can't take advantage of it. As well as if it is less you don't loose any money. It is a contract established at the time of opening and it is fixed except for the fact that it changes with tenure
4) Premature penalty of 0.50% to 1% can be waived by bank at will. Don;t ignore to ask your bank officials on this. This is inherent and most of us miss to make use of it
