Withdrawing money from SBI FD prematurely? Here are penalty charges you may end up paying

The bank fixed deposits have remained one of the safest investment options over the years. Bank FDs offer a wide range of tenures to choose from, ranging from 7 days to up to 10 years. All the banks offer different interest rates, giving some flexibility to investors. However, the rates have been falling lately. And, if you are withdrawing money prematurely because of this or any other reason, you may end up paying some extra amount.   

The bank FDs can be broadly categorised into two types – FDs with premature withdrawal and FDs without premature withdrawal. In case of an emergency, depositors can opt for premature withdrawal from their fixed deposits. This attracts a penalty.   

Country’s largest lender State Bank of India clearly mentions the penalty charges on all its fixed deposits. Here is how much you will end up paying as a penalty:  

For Retail Term Deposit up to Rs 5 lacs, the penalty for premature withdrawal will be 0.50% (all tenors).

For Retail Term Deposits above Rs 5.00 lacs but below Rs 1 crore, the applicable penalty will be 1% (all tenors).

The interest shall be 0.50% or 1% below the rate applicable at the time of Deposits for the period Deposit remained with the Bank or 0.50% or 1% below the contracted rate, whichever is lower.

No interest will be paid on Deposits which remain for a period of less than 7 days.

The bank was among those who revised the interest rates on FDs recently. SBI pays an annual return of 5.40 per cent to senior citizens and 4.90 per cent to other customers retail deposits - or fixed deposits up to  Rs 2 crore - of a maturity period of one year to less than two years, according to the lender's website. This is a 20 basis point decrease compared to the previous rates.