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POSTED BY ON March 27, 2012 11:20 pm COMMENTS (3)
I have kept Fixed Deposit’s (FD) in my mother’s name and the interest is being used for her monthly expenses. I have several of them (different amounts, interest rates, and maturity) and would like to consolidate into one FD. I am also considering FD’s with companies like Shriram Finance etc. So, I want to compute the penalty before going for premature withdrawal of existing FD’s. Also need to consider the higher interest rate of the new fixed deposit to see whether or not it will compensate the premature withdrawal penalty in the long run.
Is there a formula or calculator or Excel spread sheet to do the computation?
Any suggestions and comments will be helpful. All the FD’s are in public sector/nationalized banks. Thanks, Venkatesh.
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Dear Venkatesh, to add to my prev. reply, please do not put all money in a consolidated FD in a company deposit. You may put a small amount say 10-15% of full money but not all.
Thanks
Ashal
My Two Cents:
Premature deposit penalty varies from bank to bank. Offlate some bank dont charge for premature withdrawl.
Regarding going for One FD or bigger FD’s. You should ensure that you have emergency funds.Adavantage of Bigger FD is, you dont have to Submit 15G/H from in many places.
The bank where you have deposits, if the same bank is offering better interest rates, then you can negotiate with the bank and convert them to new FD’s with them.
Dear Venkatesh, May I ask, Why do you want to consolidate? Some how I feel, such scattered FDs are better for liquidation purpose, in case there is an emergency, so your mother ‘ll not break her single consolidated deposit.
thanks
Ashal