New Delhi: Next time you wish to cash in your fixed deposits, be ready to pay a penalty of as much as one percent of the investment if money is withdrawn before completion of the maturity period.
In a bid to discourage premature withdrawal of money from fixed deposit accounts, banks have decided to impose a penalty on such transactions to minimise any impact on their liquidity position at a time when rising interest rates are pushing up the cost of funds for them.
RBI has left it to banks to decide whether they want to impose any penalty on premature closure of fixed deposits.
As such, the customers are given a return lower than the promised interest rate in case of early withdrawals.
Source: PTI
