SBI FD Premature Withdrawal Penalty Calculator

A fixed deposit (FD) is an interest-bearing investment that offers assured returns for a fixed tenure. In this, the depositors invest a fixed amount of money with an entity for a fixed tenure at a contracted rate of interest.

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We are rated^~

7.7 Crore

Registered Consumer

50

Insurance Partners

4.2 Crore

Policies Sold

Disclaimer: *The Guaranteed Returns are dependent on the policy term and premium term availed along with the other variable factors. 7.1% rate of return is for an 18 years old, healthy male for a policy term of 20 years and premium term of 10 years with Rs.10,000 monthly installment premium. All plans listed here are of insurance companies’ funds.

An Overview- SBI FD

State Bank of India (SBI), India’s PSU banking behemoth, offers fixed deposits generally for a tenure ranging from 7 days to 10 years.

In addition to safety as an option, a fixed deposit is liquid as well. One may open and close a fixed deposit anytime as per convenience. Investors have the choice of continuing their fixed deposit (FD) till maturity or accessing it before the end of tenure by way of a premature withdrawal in the event of a need.

However, it's not advisable to close one’s fixed deposits prematurely as a nominal amount may be needed to be paid by the depositor as a penalty to the bank. This is done to encourage the habit of saving and discourage frequent withdrawals.

How Does SBI FD Premature Withdrawal Penalty Calculator Work?

The calculator depicts the following penalty calculations:

For Term Deposit up to Rs 5 lakh, the premature withdrawal penalty charged will be 0.50% (all tenures).
For Term Deposits above Rs 5 lakh, the applicable penalty will be 1% (all tenures).

To begin with, no interest is payable on Deposits that remain for a period of fewer than 7 days. Further, the interest rate receivable shall be 0.50% or 1%below:

The contracted rate; or
The rate applicable at the time of fixed deposit for the tenure the fixed deposit remained with SBI, whichever is lower.

For example, if Rs. 1 crore fixed deposit is opened with SBI for 2 years at 5.10% p.a. and the investor wishes to withdraw it after 1 year prematurely. Then, the penalty payable shall be @1%. Also, the revised interest rate payable on the fixed deposit shall be 4.00% p.a. (5.00% - 1.00%).

Prematurely withdrawing the fixed deposit can cost an investor due to the penalty and a possible reduction in the effective interest rate. Therefore checking the bank's premature withdrawal terms and conditions existing at the time of placing the fixed deposits is of paramount importance.

Advantages:

The primary purpose of using the SBI FD Premature Withdrawal Penalty Calculator is to evaluate, at the click of a button, the economics of liquidating a fixed deposit investment before its scheduled end of tenure.

It eliminates any cumbersome, manual, error-prone calculation. Some of the critical advantages of utilising the SBI FD Premature Withdrawal Penalty Calculator are:

It determines the outcome with reasonable accuracy.
It helps to save time.
It is easily available online.
It helps in comparing various options.

Check out our other calculators: SIP Calculator

How Can it Help?

While interest rates on bank FDs are subject to changes from time to time, depending on the prevalent interest rate scenario, fixed deposits already contracted by deposit holders remain constant for the tenure of the deposit. If, in any event, the deposit holder chooses to redeem the deposit before the date of maturity, a penalty will be charged, which depends on the policy of the bank.

SBI FD Premature Withdrawal Penalty Calculator is a convenient online tool to help an investor estimate the amount of penalty that is payable in the event of a premature withdrawal. It assists an investor to determine the penalty that is payable in the situation of a premature withdrawal of a fixed deposit.

In addition, the SBI FD Premature Withdrawal Penalty Calculator provides a platform to determine the amount of income one may have to forego while prematurely withdrawing the fixed deposit.

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FAQ's

Q1. How does the SBI FD Premature Withdrawal Penalty Calculator help in emergency planning?

A1. Once one determines the loss of interest and the amount of penalty payable, one may estimate the amount due on premature withdrawal of a fixed deposit in an emergency.
Q2. Is the SBI FD Premature Withdrawal Penalty Calculator free to use?

A2. Yes, the SBI FD Premature Withdrawal Penalty Calculator is free to use.
Q3. Is the use of the SBI FD Premature Withdrawal Penalty Calculator time-consuming?

A3. The calculator takes as much time as one would take to input the various parameters viz. principal amount, date of deposit and original tenure.
Q4. What is the income tax implication factored in by the SBI FD Premature Withdrawal Penalty Calculator?

A4. Since income tax payable on interest on fixed deposit differs from person to person, the calculator does not take into account income tax implications while calculating interest. The estimated amount on premature withdrawal is indicative and is subject to TDS deduction.
Q5. Will the amount determined using the SBI FD Premature Withdrawal Penalty Calculator vary?

A5. The projected amount as depicted in the calculator may vary in case the actual date of premature withdrawal varies.

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