Breaking your Fixed Deposits before Maturity – Whats the Procedure ?

Today let me share the procedure and some points regarding premature breaking of your fixed deposits. We have seen, that due to the ease of creating fixed deposits online, more and more investors create them if they are not able to find the right purpose of their surplus money and then in case of emergencies, they have to break their fixed deposits prematurely.

Procedure for Breaking Fixed Deposit Before Maturity

Now the procedure for breaking the fixed deposit is fairly simple and much faster than many believe. However the whole procedure can vary across PSU banks and Private banks. The procedure can also vary if you take into consideration online vs. offline

When you create a Fixed Deposit or Recurring Deposit, the bank sends you Deposit Certificate or receipt after some days of opening it (Incase of many PSU banks, you need to collect it manually by going to branch) . This is just a receipt or a proof of deposit. Now you can carry this deposit certificate to branch and ask the bank official to break your FD, they should be able to process your request.

However incase you do not have the deposit receipt or have lost it somewhere, you don’t have to worry much, in that case you will have to give them a letter or fill up a premature FD breaking form available at bank branch, read further to know about it. Read about Requirement of Fixed Deposit on Opening Lockers here

Breaking Fixed/Recurring Deposits Online

A lot of banks allow you to open create fixed deposits online from your net banking account. It’s fairly simple and fast, but when it comes to breaking fd before maturity, a lot of banks allow it online, but many do not. I have seen that most of the private banks allow you to break your fixed deposits online itself, all you need to do is go to “service request” section of your net banking and you will see a section where you can break the fixed deposit before maturity. In ICICI, when you go to “service requests” section, on the right hand side you can see “Fixed/Recurring Deposits related” , you can go to that section and choose “Premature Closure of Deposits” and then choose the FD/RD number and cancel it. Your request will be processed in next working day and you will get the money in your account. Check the screenshot below which shows you that.

Breaking Fixed Deposit before maturity Online

Breaking Fixed/Recurring Deposits Offline at Branch Level

A lot of PSU banks do not allow breaking your Fixed deposits or Recurring Deposits online. You will have to visit the branch itself and manually break it. Here is what you need to do

  • Step 1 – Write an Application on plain paper mentioning you want to break your FD/RD, mention the account number where it should get credited, mention the Deposit Number. At times, you have to fill the premature FD Breaking form available at bank itself. In almost all the cases, the fixed deposit is broken instantly, the bank official must be able to do it with a click of the button.
  • Step 2 – Attach an ID proof (PAN etc). Private Banks have the Xerox machines inside the bank itself, so you just need to carry the original id proof and they will help you with the photo copy.

Below is a sample letter stating wish to break the fixed deposit or recurring deposit prematurely.
Breaking Fixed Deposit or Recurring Deposit Letter

Important – Incase of companies with current account, company seal will be required along with signatures of partners.

Penalty on Breaking Fixed Deposits before Maturity

When you break fixed deposits prematurely before maturity, you will not get the same interest rate offered originally. You will get the interest rate which is applicable for the tenure you actually ran the FD for. For example, suppose you opened the FD for 1 yr originally, and the interest rate offered was 9% .

Now if you closed the FD in lets day 3 months, and if the interest rate for 3 months FD was 7%, then you will get only 7% interest for the period of your fixed deposit. Also in several cases, there might be penalty charges which is nothing but another reduction in your interest rates. Like bank rules can say that if your FD was opened for 1 yr, and if you break it before maturity, you will get 1% less interest than offered. many a times, there is no penalty for short term fixed deposits.

Some Important points to know

  • There are various kind of fixed deposits products, at times there are fixed deposits which also allow you to withdraw the FD money instantly through Debit Card itself, like for example Kotak bank flexi-Deposit.
  • Also, if your fixed deposit is under Sweep In Account, then you should be able to withdraw the money instantly without manually breaking it, read more about sweep in accounts here.
  • For some banks fixed deposits (private banks mostly), the some FD’s get broken if you issue a NEFT/RTGS transfer to some bank account. Like if you have a 2 lac FD in Kotak Bank (flexi deposit) and if you transfer Rs 2 lacs in another account through NEFT/RTGS/IMPS , then the transfer happens and the FD is broken.

In worst cases, your Fixed deposit breakage might require some approval from main branch, but it should not take more than 2-3 days in worst to worst cases.

Some Tips

  • If you already have few commitments in near future, avoid creating long term Fixed deposits, create short term FD’s
  • Instead of creating one large FD (example 5 lacs FD), better create 2-3 FD of small amounts like 2 lacs + 2 lacs + 1 lacs. This way if you need partial amount (lets say 3 lacs or 2 lacs or 1 lac), you will be able to break the FD’s partially. It won’t affect the full amount
  • You can take a loan against Fixed Deposit or overdraft against your FD.

Share your personal experience about breaking the Fixed Deposit in comments section if any!. Did the article help you !

94 CommentsAdd Comment

  1. SandeepJana

    Hi Manish,

    Have been following your articles from a long time and really appreciate the information and knowledge being shared. It really helps clarifying a lot of doubts.

    I just wanted to confirm one of my understanding regarding Fixed deposits and premature withdrawal.

    Am I correct to understand that a short term FD of let say 3-6 months with the option to auto-renewal is much better option in terms of return as compared to opening a long term FD with the option to do premature withdrawal in case of emergency? For example I will get a return of let say 7-7.5% if I do a FD of 3-6 months without making a premature withdrawal but I will get only a return of 8.2-1.0 (penalty) = 7.2% if I do a FD of more than 1 year but make a premature withdrawal after 6 months ?

    Or I am missing some point ?

    Taxation should be same in both cases as per my understanding.

    Thanks in advance for your reply.

    Sandeep Jana

  2. SAGAR

    Hi Manish Sir,

    I am sagar working with service industry in account dept. we had put a fdr against tender of railway. but we have not submitted in stipulated time. then we have going in sbi bank to cancell for them. that time sbi says please take a NOC letter to cancell it from which name drawn. so what i do? because third party is not giving NOC Letter. & bank having NOC letter. so what am doing????

    Please Reply…….

  3. Dhiraj

    Hi Manish,

    I have a very critical case here. My Father and my aunty (father’s sister) has joint Fixed Deposite in SBI Bank. It was matured in the year 1993. I do not know why they did not withdraw the sum. But when i approached the bank now they are clearly denying that this Fixed Deposite can not withdrawn now because we do not keep more than 15 years old records. Now i do not understand what should i do now to the get the sum.

    It will be highly appreciated if you adivse me on that.

    Thanks in advance
    Dhiraj Singh

  4. nikhy

    I have opened an fd in sbi bank for the purpose of getting credit card. I will get it within 20 days but because of some emergency situation I need to break the fd. Is it possible? What are the process I do for that?

  5. vinay

    Hi Manish,
    I have several FDs in idbi bank which I opened online but don’t have deposit receipt of a single one. I have not nominated any one as nominee because in idbi bank it can’t be done online, one has to visit bank branch to submit the form. My question is if I die before maturity of FDs and my relatives want to break the FDs, how can they do so?

  6. Jyoti

    Hi Manish Sir,

    Sir me apna msg/ query hindi me share krugi… Actually sir meri FD this Rs.45000/- ki jo mene last year renew krai thi but jb mai is saal renew krane gai apni FD to bank manager ne btaya ki meri FD last year hi mature ho gai thi or mere without signature meri FD renewal date ke bad automatically close ho gai jise hm apni language me kehte he FD tut gai… lekin sir mera amount mere account me aya esa mere statement pass book me show kr rha he or mera amount ATM ke through withdrawal hua he… but sir mene apna amount nhi nikala or meri FD bhi mere pas thi jo ki ab jb me is saal renew krane gai to bank ne meri FD apne pas hi submit krli or bola ki mujhe meri FD ka amount last year hi credit ho gya tha mere account me…
    Please suggest me ki me kya kru???

    I hope u getting my point what i want to ask you & share with you….

  7. Mayur

    I have FD created in my home branch of SBI in Ahmedabad. Now currently i have settled in Pune. I have the original FD receipt and my original PAN card, can i visit any nearest SBI branch in Pune with original documents and request to break the FD prematurely. Please advise. Thanks.

  8. Sravya

    I deposited 30,000 as fixed deposit in Andhrabank using internet banking.The Maturity date of that fixed deposit passed and the interest for that fixed deposit is credited in my account but the investment amount not yet credited in my account.What is the next procedure to get the invested amoount

  9. nikhil murali

    Dear manish,

    I just was looking for a blog like this Loved it.. I have a query, recently my fiancée’s mother died.. She and her mother( fiancée’s grand mother) had a joint fd in icici bank. Now, fiancée’s mother is the second applicant and her mother (grand mother) is the first one. Last week I went with her to the bank to break the premature fd for some personal work.. But the banking officials are saying that you cannt break it before maturity.. As beign aa software engineer i dont know much about this field.. So, If know any solution please suggest me or what step should i take if they denies.. Waiting for your response..


  10. lokesh

    Hello sir,

    I deposited 200000 in agrigold…. In the form of fixed deposits, now I hear that the company is doing fraud…..can I withdraw money from agrigold or not??

  11. MANU

    I ended one FD prematurely on 20 Nov. Its status changed to closed on 21 NOv. But money has not been credited to my account after 11 days. It was an online FD that I opened on 17 Nov. I have four complaint numbers with assurance from branch too. But nothing has been done till now. can i appeal to bank ombudsman??

  12. Mahesh Singh

    Dear Manish,

    My mother has an FD in Central Bank of India. Unfortunately she has lost the original receipt of the FD.
    She wants to premature close the FD. The bank is informing her that she has to apply for Duplicate FD through an indemnity Bond. They are also informing her that Premature closure is not allowed for a duplicate FD and it is allowed only for Original FD. Is this TRUE?

    Please advise what options she has?

    Thanks in advance.

    • I think they are just misleading her . The receipt is only a receipt document and nothing else. A bank cant deny her from breaking the FD if the reciept is missing . She can fill up a form and break the FD along with her ID proof


  13. Rohini

    So the 1% penalty that they levy is a reduction in the interest rate? But we will get back the original amount that we invested? Say we invested Rs. x for 1 year. Maturity amount was Rs. x + y (y being the interest amount). Does premature withdrawal mean we will get back Rs. x at any cost? (it may only result in Rs. y being lessened?)

    • parimal

      Yes Rohini u r correct.When you deposit money in any bank under savings or fixed deposit the principal amount is never touched.Only the interest may vary depending upon which type of account u have opted for (fixed,savings,recurring etc),or if it was a premature closure of the account.So the bank can deduct only the interest & not the amount which you originally invested.

  14. Rituraj P

    Hi Manish,

    I recently opened an FD in Sbi bank. Now I want
    To break the fd but I won’t be able physically present
    At the time of breaking of the FD. Hence my father
    Will be doing that on my behalf. Upon enquiring the
    Same at SBI they first said just sign and put your savings
    Account number at back of deposit certificate. Now upon asking again they say write an application in name of branch manager , sign the back of deposit certificate and mention the savings account number. So that has left me confused. Can you
    Please help me with the procedure ?


    • I think an authorization letter is mandatory , how can someone go and claim that they know you and break your FD ? I think you should go as per their suggestion


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