Premature FD Closure and Renewal at Higher Rates

POSTED BY Ram ON July 15, 2011 9:39 am COMMENTS (2)

I have some fixed deposits (compounding, reinvestment of interest) with HDFC Bank at lower rates of 7/7.5 percent. These are mostly 2 year FDs or in that time range, Also, HDFC Bank has a premature withdrawal penalty of 1%.

Considering that the rates are now around 9.25% for just 1 year 16 days, would it be more beneficial to prematurely close and renew the FDs with the new rates?

Also, does anyone know of a calculator that can make a “Yes/No” decision like this on FDs? Such a calculator would be very useful to many people.

Thanks,

Ram.

2 replies on this article “Premature FD Closure and Renewal at Higher Rates”

  1. Vaibhav Kini says:

    PLease do the Math behind the calculation and them make a move..

    THis below link would be useful

    http://ivaluemoney.wordpress.com/2011/03/05/closing-that-fd-2/

  2. AKP says:

    Better to close and start with recent interest rate. you can use ji calculators.

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