Everything you should know about Breaking your Fixed Deposits before Maturity

POSTED BY Jagoinvestor ON August 12, 2013 COMMENTS (162)

Today let me share the procedure and some points regarding the 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.

are you thinking of breaking you fixed deposits before maturity? here is the procedure

Procedure for Breaking Fixed Deposit Before Maturity

Now the procedure for breaking the fixed deposit is fairly simple and much faster. 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 (In case 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 in case 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 the bank branch, read further to know about it. Read about Requirement of Fixed Deposit on Opening Lockers here

Online Procedure of Breaking Fixed/Recurring Deposits

A lot of banks allow you to open create fixed deposits online from your net banking account.  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 the 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

Offline Procedure of Breaking Fixed/Recurring Deposits  by visiting the Branch

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 mentioning you want to break your FD/RD, mention the Deposit Number and account number where it should get credited. At times, you have to fill the premature FD Breaking form available at the 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 photocopy.

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

Do I need to pay fine 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 let’s say 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 are nothing but another reduction in your interest rates.

Like the 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 time, there is no penalty for short-term fixed deposits.

Best practices before you create Fixed Deposits!

  • 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 a partial amount (let’s 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.

Some Important points to know

  • There is 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 the 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 the case of companies with a current account, company seal will be required along with signatures of partners.
  • In worst cases, your Fixed deposit breakage might require some approval from the main branch, but it should not take more than 2-3 days in worst to worst cases.

Share your personal experience about breaking the Fixed Deposit in the comments section if any!

162 replies on this article “Everything you should know about Breaking your Fixed Deposits before Maturity”

  1. GOPI DORJEE says:

    I want an application format for withdraw fb before maturity

    1. Jagoinvestor says:

      Its available in bank

  2. prasad says:

    i hv deposited at out of state bank as F.D. I want to cancel for the same in home state. is it possible.?

    1. Jagoinvestor Admin says:

      Hi prasad

      I am not clear on what is your question. Please repeat it with more clarity


      1. Praveen says:

        He/She is asking that if the person had opened a F.D. account in one state and wants to break it in another state of the same country.
        Is it possible?

        1. It will depend on the bank , if its linked with other branches or not. I think it should be possible at most of hte banks these days.

  3. Amal says:

    Correction , It will be Rs 402236/- only

  4. Amal says:

    I have opened FD of Rs 4020236/- on 25.09.2013 for a period of 5 y at 9.25% interest with monthly interest payable in SBI bank. Now I like to withdraw prematurely. How much i will be penalised or how much I will get back on withdraw? Pl help me.

    A K Banerjee

  5. Nikhiljethwani says:

    I have a fixed deposit in bank of india of ₹35,000. For 3 years. And now i want to break my FD .
    It is only 2 months mature
    And problem is that i want money tommorow only and also i have lost the FD RECEIPT
    NOW PLEASE tell me how can withdraw my money urgently

    1. I dont think it can be done this way. Banks have process and they need to be followed. Talk to bank one this .

  6. klassik D says:

    pls sir… i just got a letter from my bank dated 3rd sept 2016, stating a roll over of my FD for 6% as against 9% which I initially fixed to for a period of months (10million naira) without any authorization from me what do I do in such a case… am not interested in that rate of FD. pls advice thanks

    1. I am sure they must have given a choice to stop your FD’s in that case, so better stop them if you want to move ahead !

  7. Naveed says:

    Hello sir, i went to icici bank to break my tax saver fd but they refused and said it cannot be done before completion of 5 years. what should i do

    1. Yes, it cant be done !

  8. kashi says:

    When we want to premature one Fixed Deposit for Rs.100000/- at Allahabad Bank the banker ask one request letter with proper reason signed by two holders, discharge over back of the Receipt with two Revenue Stamps duly signed by two holders, inform us that the premature proceeds will transfer in the name of said two holders only through bank account or draft. Please inform RBI / IBA guidelines about premature payment of Fixed Deposit.

    1. Not sure . BUt you can ask them about this and give a written proof on this . Mail them

  9. deva says:

    hi sir one of my relative is opened FD in muthooth fincrop as a monthly interest scheme for 6 years, as on date 1 year is completed, now she wants go for premature withdrawal due to emergency, but the muthooth people says its locked for 6 years, till mature date we cont foreclose the FD. please please please tell me how to get money from them and whats the procedure.

    1. Your relative must have read the terms and conditions of the document which he signed. Right ? Please check what is written there!

  10. sumit shankar mishra says:

    my fd is in uco bank and it is joint fix deposit .
    ….nd now it’s maturity is completed but its recipt were in custody of my partner what shall i have to do now…..nd how i can get my money without that fd recipt

    1. Reciept is not mandatory always . Say that you lost it ..

      1. sumit says:

        then how can i get fdr without partner because i don’t have any proof regarding my fd…branch manager was try to get that to put my name…but nothng outcome was come…

        1. You FD was created along with the account linked right. Its there ! .. Just that you dont have a document . Thats ok . Check with manager what is the way out !

          1. sumit shankar mishra says:

            sir, i find out my fd account number and details about fd ….
            sir …in that fd first account holder is my grandfather and after that we both nd my grandfather was passed away he was no more in this world….sir ..now give me some suggestion what to do….for break that fd

            1. First check about this with Bank. I dont think its going to be very straight forward to break that FD as it has your grandfather as a holder!

  11. Pallavi says:

    Hey I want to break my fd early due to some urgency but fd account was created by offline proces can I break that online??

    1. You cant break that offline !

  12. Divya says:

    I have a fd of sbi which has been completed in 2012 after that it was not possible for me to renew my fd because I had shifted from that city. Now I am in another city and I want to break my fd please tell me the procedure.

    1. Thats bank specific and you need to check with them only!

  13. MANJESH says:

    Hi sir,
    I have a FD account in SBI for a tenure of 5yrs.(tax. saver FD account), opened nearby around jan’16,but due to some emergency reasons I want to break that account. Shall I be able to do this or not….

    1. Yes you can do that, but then your income tax deductions will be reversed !

      1. kishore says:

        can you please explain me the process of breaking tax saver fixed deposit? i have urgent need of money and i have multiple tax saver fixed deposits which i want to break, (deposits opened in 2014,2015 and 2016) what is the exact process?

        1. You need to check about this with the mutual fund company !

  14. Madvesh says:

    Hi Manish, is it possible to break tax saver FDs and NSC bonds due to some urgent requirement of money..?

    1. Yes you can break it , but your tax deductions you enjoyed will get reversed

  15. Swetha says:

    Hi Sir,

    I have deposited 1 lakh in X bank , i have requested for monthly interest rate, FD was for 3 months, i would like to break it now due to personal emergency, Do i need to pay penality?

    1. Not exactly, just that you will get less interest ..

  16. Preethi says:

    Hi my father recently expired and he had few fd ‘s in sbi bank which we have settle but two days back got a txt on his cell about two more fd’s which ll be maturing on 2 and 3 May but I’m unable to find their deposit receipt with which I can withdraw as I don’t want to renew the fd . He doesn’t even have online banking so what can I do in this situation where I only got messages from bank on his cell regarding the fd and have no papers to show in the bank

    1. Its fine if you have lost it, Check with bank on what needs to be done and what documents is required?

  17. pravin says:

    I m a banker, i hv a small query , Can i accept an original FD receipt today from our customer which has be closed on fututre date. Or advice him to come on that specific date.
    plz advice.

    1. Hi pravin

      Thanks for asking your question. However, I dont think I am eligible to answer your query as its either out of scope of my knowledge or its not related to money matter directly


  18. Nadim Modak says:

    i have removed some amount last month from my fd can i remove some amount of money in this month too

  19. keval says:

    Humne ek fixed deposit karaya tha 10 lac ka bank of maharashtra me.ye three year ke liye tha.isme monthly interst milta h but mujhe use break karna h .but bank refuse kar raha h .vo ise close nahi kar rahe h .please help me

    1. Ask them the reason for it !

  20. intekhab says:

    Dear Sir,

    Pls suggest me.

    I had open fd in sep. 2014 and maturity date was 31-3-2016
    It has auto renew how can withdraw of this

  21. jayeshjain says:

    Dear sir,
    I have a FD of rupees 40000 in adarsh cooperative bank society at village ghatol, district banswara , state rajasthan.
    before two year i applied and i got also a conformation reciept of it. now i want money before its maturity for some emergency, but the manage of the above said bank is denied to break my fd. he is saying that it is rules that before 3 year you are not able to get it.
    please help.
    jayesh jain
    ghatol banswara rajasthan.

    1. Complain to banking ombudsman !

  22. Gayatri says:

    Hi manish

    I had opened a fd joint account with my husband amounting Rs 200000 since 2013 . Suddenly my husband expired on jan 2016. Due to urgent financial needs i requested Uco bank branch manager to pre mature withdrawal of fd. He advised me to apply with death certificate. I did the same. He assured me that the amount of fd will be credited to my Sb account within 24 hrs but after expiry of 4 days amount was not credited.
    then i again rashed to the branch manager for said delay. He asked me for legal heir of my husband for break my joint fd with me. MY SON AND MARRIED DAUGHTER BOTH LIVES IN OTHER STATES .AND COMES HOME AFTER A LONG INTERVAL. during opening of fd no such clause was endorsed in fd opening form . Request intimate how can i withdraw the amount immediately in this situation.

    1. Bank is correct here. Breaking a FD requires all these things if a WILL is not there..

      1. Sanju says:

        Why ? It was a Joint Account !!!

        1. It must be a former or survivor mode, where if the primary holder dies, the other person takes the charge. IN that case you will have to prove that the first person is no more.

  23. rekha says:

    i just want to ask that my husband has died in a car accident. the court hasfixed deposit of300000 rs on my daughters. shall i break that fd now are there any problem

    1. If its linked with daughters , then I think you wont be able to break it !

  24. Ankit says:

    Hi Manish,

    I opened FD’s with PNB through netbanking and selected the option to autoclose it on maturity and credit the maturity amount in my savings account (using which the FD’s were credited).
    But even after maturity the amount was not credited to my account. I complained about this to the bank and after many efforts the amount was credited to my account but after around 50 days from the original maturity date.
    Now when I asked the bank to pay me the interest for the period (around 50 days) for which they have kept my money without my permission, they simply denied to do that.

    I googled a bit to find if there are any specific rules when bank hoards money like this but couldn’t find any.

    Could you please advise me what can I do in this context.

    1. Hi Ankit

      from what I know, a lot of PSU banks do not auto credit the FD money once matured unless you go to bank and ask them to do so .

      1. Ankit says:

        Thanks Manish,

        Before this experience everything was fine and the maturity amount was getting auto credited everytime upon maturity.

        I’ve gone through an RBI circular which states that after maturity if the bank keeps the customer money with it, be it a bank holiday or whatsoever, that bank has to pay interest for that period.

        In my case the bank hoarded it for almost 50 days, I’ve raised a complaint with them, lets see what the outcome is.

        1. In that you should show them this circular and later complain to their grievance cell also .

  25. Kishor says:

    I understand that premature withdrawal penalty for FD amount less than 5 lakhs is NIL at SBI. Can u please tell with effect from which date this provision has come to an effect,

    1. Hi Kishor

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


  26. Shikhar says:

    dear sir,

    my mother had an FD of around 5,00,000 . This was due to mature next week. But my mother preclosed the FD to rewew again as she was not sure auto renew happens. Now the Bank PNB has deducted 52,000 rupees without informing her. they only said some penalty will be levied without letting her know the exact amount.

    my mother complained to bank manage and they said they will check with main office. Since 52000 is a very big amount , I was wondering if there is any way to avoid losing this amount?


    1. There cant be any penalty like that. There is mostly some TDS related issue . Check with them !

  27. amit says:

    Sir I having one query regarding FD in SBI
    Sir issue is I had deposited 2 lacs as FD in SBI bank for 2 years but due to requirement of money , I withdraw some money around 1.20 lacs after one year. So my question is how will I receive my interest amount on my money on remaining balance n what will be interest rate for my earlier amount before withdrawing money. N sir if i done premature withdrawal then kis month tk ka mujhe interest milega.

    1. Hi amit

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


  28. Helli Sir,
    I am having FD amount of 20,000/- rs in ICICI Bank through online but now i need money urgent but i am not able to preclose the FD through online what need to do

    1. You cant do that. You will have to visit them to the branch

  29. gurinder says:

    My father was dead in an accident and we got insurance claim of Rs.21 lakh in three different accounts i.e of my mother,me and my sister.(7lakhs rupee in each account) The money transferred in my mothers saving account we got it without any difficulty but during the time when claim was transferred into me and my sisters account we both were minor(less than18yrs age).So our advocate insisted to make fd of claim transferred in my and my sisters account and so we made a fd of the two seperate7-7 lakhs rupees in two accounts that is pf me and my sisters until the age of18 but the fd was on auto renewual means every time fd is mature it is again started for original term.Now when me and my sister are of 18 our FD papers got lost(i dont know why there was written pay as per court order on both FDs )and when we asked the bank to break our FDs they said bring the original FD papers but we had lost both of it.We got duplicate FD papers made from the bank means papers with written Duplicate on them.We tried to break FD with that duplicate papers and we were succesful also to transfer it into our saving account but then the manager of bank said to check there employees for original papers to check over internet and he found that papers on which it was written pay as per court order and he again transferred the savings account money to fd and said that why it was written pay as per court order.We asked our advocate and many other they didnt knew so our fd is still going on without any reason but we want to break it .Please tell what to do.

    1. THis is more of a legal thing and I cant comment on this . Its better to go as per what your advocate says .. Also try to get info by RTI from bank

  30. SandeepJana says:

    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

    1. Yes, your understanding is correct

  31. vardhan says:

    How to break prematured tax savings FD ?

    1. Go to bank and you can ask them to break it

  32. SAGAR says:

    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…….

    1. Hi SAGAR

      Your cases is a bit complex and I think we are not the right people to comment on it.

      My suggestion would be hire someone who is professional in this area and consult them


      1. SAGAR says:

        Dear Manish Sir,

        Thanks for your reply….

  33. Dhiraj says:

    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

    1. you should complain to rbi on this . also take help of RTI

  34. nikhy says:

    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?

  35. vinay says:

    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?

    1. its not relative but the legal heir who will have to first submit the documents that they are legally going to hire all your properties and then they can get it


      1. vinay says:

        Do I need to submit nomination form to the branch? If I don’t will it create any problem?

        1. Why it create a problem ?

  36. Jyoti says:

    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….

    1. Jyoti

      This looks like some one did a fraud , check with branch manager on this , and involve banking ombudsman


      1. Jyoti says:

        Thank u sir for reply me but manager to ulta hme hi fraud bol rha he or even hme dhamki bhi de rha he ki vo hmare against complaint krega Rs20 lack ka fine lgayega vo hm pr… so now in this situation what will i do?

        1. Complain to banking ombudsman on this !


  37. Mayur says:

    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.

    1. I guess that should be possible .

  38. Sravya says:

    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

    1. Check with the bank on this .

  39. nikhil murali says:

    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..


    1. Hi nikhil murali

      I am not 100% sure on that. Please open a thread on our forum so that someone who knows the answer can reply you on that.



      1. nikhil murali says:

        Hey Manish,

        Anyways thanks a lot for replying and providing me the link…

        1. Welcome .. Glad to know that nikhil murali ..

  40. lokesh says:

    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??

    1. How will you get it unless they return it ? I think its going to be tough for you if its really a fraud !

  41. MANU says:

    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??

    1. First step is to meet the branch manager . You can appeal in Banking Ombudsman only after 30 days of followup with your bank.

  42. Mahesh Singh says:

    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.

    1. 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


  43. Rohini says:

    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?)

    1. parimal says:

      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.

    2. Yes, you will surely get invested amount X + new Y , where new Y is less than original Y

  44. Rituraj P says:

    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 ?


    1. 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


  45. Vivek says:

    Hi Manish,
    By mistake I have opened an RD online in HDFC Bank but actually I was to open the same few days later(due to my salary cycle).I tried to liquidate it but its saying contact bank.
    Please suggest any other option instead of going bank or I need to keep the RD open for sometime to liquidate it.

    1. No Vivek

      You dont have any other option. Once you have done it online, its done, Now you cant change it saying that it happened by mistake . So you need to go to branch and then close this RD and then later restart it .

  46. Deva says:

    Hi Manish,

    I invested in an FD in SBI Bank for 5 years. The Bank Manager insisted that I create the FD online but I was reluctant as I saw some statement in the website “Pre-mature closure of e-TDR/e-STDR under tax saving scheme is not allowed during the lock-in period. ” So I was wondering if I did it through them, then I would have an option to break my FD if needed. On asking the Bank Manager concerning this, she said FD’s created either online or otherwise for tax saving purpose cannot be broken at all. I was little taken back cos I was thinking all the while that I could break those 5 year FD’s in case of emergency. Is what the Bank Manager said true?

    1. Hi Deva

      I suggest this needs more discussion, hence please open a thread on our forum – http://www.jagoinvestor.com/forum

  47. RAJANNA K V says:

    Dear Manish,

    I want to share my experience regarding FD breaking online or premature withdrawl.
    I am an NRI & have my A/C in HDFC. I have opened FDs online for 1/2/3/5 years tenure. Some of my FDs were booked for 8.75% ROI for a term of 3years & recently ROI was increased to 9%. So I thought of breaking the existing FDs & to create new FD for revised ROI. Initially I wrote to HDFC relationship manager about this matter & he also suggests that I can do so. In my case an FD booked for 3 years had completed 1 year & I wanted to break this FD online. As per HDFC if we break the FD after 1 year then there is no penalty for premature withdrawl(As my FD originally booked for 3 years term). So I started to operate this through netbanking & to my surprise when I complete all the directions & finally a screenshot appeared saying to confirm. Surprisingly in the last line of the screenshot it is showing ” interest to be recovered”(amount equal to what was paid for 1 year) & it also shows amount to be credited to my A/C is only principal amount. So if I click the confirm button definitely I will loose the entire interest which already paid for 1 year. So I stopped the operation & wrote to the HDFC relationship manager about the issue & sent him the screenshot also. He explained many things but, he is not assuring that, if I continue the operation will he give guarantee that total interest paid will not be recovered from my A/C. Later I wrote to NRI HDFC services but, since today none of them had clarified the issue, then I wrote to HDFC grievance redressal 3 days back & I also wrote to my Branch manager also. But, till date none of the Bank officials are ready to resolve this issue & simply prolonging the matter & everytime they say, they will revert back in 4/2/1 days. This is going on with me since 26.11.2013 & I am yet get the clarification for this. So I request my friends who have their FDs in HDFC & while breaking the FDs be carefull before confirm the screen button.



    1. If I see HDFC website for NRI fixed deposits http://www.hdfcbank.com/nri_banking/accounts/fixed_deposits/nre_fixed_deposits/nre_fixed_deposits.htm

      here is what I can see

      In case of premature withdrawals:

      Before completion of 1 year: No interest will be payable
      After completion of 1 year: The rate applicable will be lower of –

      The base rate of the original/contracted tenure at which the fixed deposit is booked OR
      The base rate applicable for the tenure for which the Fixed Deposit has been in force with the bank

      So I believe on your page, its just a remark that if your FD is broken before 1 yr, then you will not get any interest . If your FD is more than 1 yr old , then you dont need to worry . I think you can go ahead

      1. Rajanna says:

        Dear Manish,

        Yes you are right, if I break FD before 1 year I will not get interest, but I am breaking the FD after 1 year. Moreover when I booked FD I chose the option of quarterly interest payout & I already recieved interest quarterly. Now it is clearly showing on the screenshot that, the total interest what I got for 1 year to be recovered. So for this none of HDFC officials are giving the clarification as why it is showing like this. Further none of HDFC officials are clarifying what will be the principal amount credit to my a/c, ie, whether the same original principal amount OR principal amount minus total interest paid for 1 year. So all HDFC officials starting from Branch manager, relationship manager, NRI service cell are simply asking for the time to resolve the issue. Finally 2 days back I sent a mail to HDFC grievance redressal & again the same thing from them also, because I got a mail just now from them asking for 5 working days to resolve the issue.

        1. Now in this case, when they are just not helping much, you have no option but to threaten them to complain to banking ombudsman and RBI . See if this wroks !

          1. Rajanna says:

            Dear Manish,

            Yes, today I got through it. Finally one of HDFC NRI relationship manager took the risk & assured me if any unwanted deductions after breaking the FD then he will see that the same will be reversed. Based on his assurance in writting I could operate the Liquidate procedure of FD & it is successful & there is no any extra deduction. As per the relationship manager it is the problem with programming & that is the reason why screenshot is showing ” Interest to be Recovered as full interest earned”. However I should thank that relationship manager who helped me in this regard. All other HDFC people starts from my Branch head, branch operations manager, NRI services cell, Grievance redressal people didnot give any final conclusion despite several reminders & all the time they apologise for the delay & request for some more days. This is how we have to struggle with the present institutions of India.

            Thank you.



  48. abhijit kulkarni says:

    Hi Manish,
    Suppose if I make a FD of 3lacs rupees,from 1April-2013 to 28Feb2014..Then also bank will deduct the TDS..becoz on month of march only we get call or mail from bank to submit the form15g…but in month of march if we dont have any FD account, then how they will dedcut the TDS..

    1. Create a FD and then go to branch to give the Form , why wait for later

  49. ahmed says:

    Hi Manish,

    I have a FD in SBI bank and the FD maturity date is near. The problem is I am not in India, I want my father should collect my FD. Can u please explain me what is the

    1. But the FD amount will come into your account itself , correct ?

  50. Vijay says:


    Is there a way to change the way in which we receive the interest? I had made an FD and opted to receive the interest at the end. After some re-evaluation, I think I could divert the interest (~3-4k) to some SIP every month. I know I can break the FD and redo everything with the appropriate choice for interest repayment.


    1. Yes, you can do that, But I dont think you can CHANGE It, now you will have to close it and reopen that !

  51. Simran says:

    Thanks for the info and the demo! Is it legal that you copy a demo of secure banking and put it on ur site?

    Anyways.. one thing I will share… (THIS CAN BE WITH ANY BANK)

    When you close an F.D. Premature at branch esp:
    1. The Customer care officer will ask too many questions on WHY ur closing.. why dont u take loan or this or that or remove half money etc. They get some rewards on Retaining a customer… (Got to know this from sumbuddy who works for a bank)

    So its better to book online and close it only… No Jhanjhat mari of dealing with irritating guys. (Mostly they have men asking questions and its very irritating if the guy is – eying at you badly)

    1. Yes. Thanks for sharing those points .

  52. kumar says:

    hi Manish,

    Thanks for the article, ICICI bank does not offer good interest rates if the deposit is broken prematurely,Say for example if you break your 390 days deposit which offers 9% prematurely in a year you will only get 7.5 – 1% which is 6.5% which is really a waste, if you break the deposti within a month you will get only 4.75- 1%=3.75% which is lesser than savings bank interest rate! they have 1% penalty for all preclosure deposits. so think before you break.

    ICICI bank interest rates below for your reference.
    7 days to 14 days 4.50
    15 days to 29 days 4.75
    30 days to 45 days 5.50
    46 days to 60 days 6.25
    61 days to 289 days 7.00
    290 days to less than 1 year 7.25
    1 year to 389 days 7.50
    390 days to less than 2 years 9.00


    1. Thanks for that info kumar .

    2. astrosunil says:

      In ICICI net banking statement for FD/RD’s there is a column “Current Balance”. I think this amount will be credited to your account after subtracting the penalty Right ?

  53. Chetan says:

    Tnx for the article !!

  54. manyam says:

    Hi Manish,

    Nice article again about a brief information on FD. But seems like a lot of more detailed information required on new kind of FD linked facilities like Sweep-in Accounts and Super Saver Accounts etc. It would be good if provided one example case using all those facilities to understand premature, partial withdrawal along with penalties, reduced ROI calculations and TDS on final interest amount etc. Also some explanation about Form 15G/H as well.

    Thanks. & Regards,

    Best Regards,

  55. Saravanan A says:

    Many of the banks allow now to create and break FD online instantly. Its much simpler than the ICICI demo shown. Just click on Close account and select the account to be closed and confirm. As simple as that. This instant closure is available in Citi Bank, State Bank of India and Indian Bank. There is a big advantage in Indian Bank, there is no pre-closure charges from April 2013 and their interest rates also comparatively good.

    1. Thanks for sharing that . I was not aware about it !

    2. parimal says:

      Is it available in SBI too?
      I dont think so.I searched a lot but did not get that option.
      Can u tell me wer that option is if at all its there?
      thank in advance

  56. Krish says:

    With HDFC bank, any one can break FD online and it instantly deposits the amount in your account. I really like the HDFC bank features with regard to Fixed Deposits online. Customer can book, nominate and break the FDs through internet banking instantly.

    Here is one query on breaking the FD. 3 months ago I booked a FD for 1 year. The interest rate for 1 yr was 8.75% and 3 months was 7.25%. Just a week ago they revised 3 months FD rate as 8.75%. If I break the FD now (3 months passed), am not sure whether bank would give current FD rate of 3 months or FD rate of 3 months pervailing at the time of booking.

    1. Yes, they will give the return for lower tenure only !

  57. Thomas says:


    I am an NRI and have an account with south Indian bank. They are providing a interest rate of 9.25 for 2 years FD. I was thinking of getting interest on a monthly basis and start a RD with the interest amount. Is it worth it?

    Please suggest.


    1. Thomas says:

      RD interest rate is also 9.25

    2. It will depend on your requirement . Why do you want a monthly interest ? Better let it accumulate it in the FD itself !


    dear manish
    the article is very fine & useful for us. What is the rate of tax cut on sweep in account.

    1. mono says:

      if you have a FD with a sweep out facility..
      then interest is given only on the portion which remains in deposit
      for example
      a FD for 1 year of 25000 with 1500o sweep out facility

      if you don’t sweep out anytime
      you get interest as if it was a normal FD …
      and similarly tds is cut ..
      if you sweep out in the 1st month 10000( 15000 is limit)
      then you FD at the end of tenure..is like
      25000 for 1 month but 15000 for 11 months( interest rate is given the same)
      and as such tds is calculated

      1. Thanks for sharing that !

  59. dinesh jain says:

    I would like to make special mentioned of IDBI Bank:

    1. their FD rates are very attractive.
    2. They don’t charge any penalty if you prematurely take out your money from FD which i think is a very good option

    1. Thanks for adding that Dinesh !

      1. ROHIT BAID says:

        GOOD ONE

    2. mono says:

      Add to it
      the IDBI staff are very good
      unlike the SBI ones..
      and yes..its correct
      that Public sector banks don’t have option
      of breaking FD online

      1. Mono, FYI, Public sector banks like SBI provides options of breaking FDs online

  60. Ashish says:

    I created a simple excel which decides whether it’s worth breaking an FD prematurely or not to take advantage or rising interest rate. https://www.dropbox.com/sh/vq8ne6qbu10if7b/Upp-TVnnuT/FD%20Renew%20or%20Not.xls

    Please publish if you see fit.

    1. Thanks for sharing that. I am sure most of the readers will find it worth

  61. ksundar says:

    Hi,nice article,
    One thing can be added: In PSU & even in some pvt banks,we need to update the FD personally even if it is given as ‘auto-renewal’ of principal+interest or principal alone.

    I think if the option is ‘auto-renewal’,then the old FD interest rate should be applied.Most of the time interest may come down from 9.25 to 9.0 or 8.75% as per the existing rates.

    If the interest rate for FD goes above as per the existing situation,we need to go to bank personally and close the previous FD(earning less interest) and re-starting the FD as per the latest higher interest rate!

    1. Saravanan A says:

      What if the interest rates have come down? In that case will they renew at higher interest rate? I think its renewed at the prevailing rate at that time.

    2. Thanks for that info . Was not aware about it !

  62. Puja says:

    Hi Manish,
    Thanks for this article. I have a lot of small small FD’s in almost all my acoounts and I am planning to buy a house for which I wanted to break these in sometime. This article of yours came in the right time. 🙂

    1. Good to hear that 🙂

  63. NAGAMOHAN says:

    Dear Manish,
    I have a doubt
    “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.”

    The penalty charges which is nothing but another reduction in your interest rates.For what ineterst rate the penalty of 1%(for example) will be done, either on 9% or 7% as illustrated above.

    Thanks for a good article as always

    1. It will be DOWN from applicable interest rate that is 7% , so 7% – 1% = 6% will be your final interest rate !

      1. Anshuman Dutta says:

        Sir i have open RD acc 6 months before in Central Bank Of India,for some personel issues i want to wihdrawn that again start to deposit .Whats your suggesstion .

        1. You can do that if you are in need of money.

  64. Joel Trinidade says:

    Dear Manish,

    This was a pretty simple topic to be put on your blog . I was surprised . After all the complexities this seemed to be too basic . Anyways Kudos !!

    Best regards
    Joel Trinidade

    1. Hi Joel

      You might be aware about the process, but trust me many are not 🙂 . What seems to be simple is very advanced level knowledge for a big number of investors 🙂 . We have all kind of investors here 🙂


      1. Ritwick says:

        Right Manish.. Thanks!!

        1. rajinder says:

          Agreed with Manish.I too had a little knowledge bout FD’s before reading this and now i understoond a lot.

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