No Penalty On Premature Withdrawal Upto Rs 1 Crore
New RBI Circular
The RBI released a circular on 26th October 2023 stating that all FDs made upto Rs 1 crore can be prematurely withdrawn without paying any penalty.
For Whom is the Circular Applicable?
This benefit will be available for all deposits made by resident Indians and NRE/NRO term deposits.
What was the Situation Before the Circular?
Before the release of this circular, all FDs upto ₹15 lac were callable, meaning the no penalty withdrawal limit was upto ₹15 lac.
What are Callable FDs?
A callable fixed deposit is where the FD amount can be withdrawn wholly or partially before maturity. All FDs that allow premature withdrawal are called callable FDs.
What are Non-callable FDs?
A non-callable fixed deposit is a scheme where you cannot withdraw the invested amount before maturity.
Callable FD vs Non-Callable FD
What Does this Rule Mean for You?
This rule allows premature withdrawal FDs up to ₹ 1 crore without paying any penalty. You can now close your FDs prematurely & reinvest when the interest rates increase.