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A Guide to FD Premature Withdrawal and Impact on FD Returns
Posted on Monday, February 12th, 2024 | By IndusInd Bank
Fixed Deposits (FDs) are one of the most popular investment options in India, known for their stability and guaranteed returns. Essentially, an FD is a financial instrument offered by banks and financial institutions where you deposit a lump sum amount for a fixed period at a predetermined interest rate. This tenure can vary from a few days to several years, and the interest rate is usually higher than that offered on a regular savings account.
How FDs Work
When you open an FD account, you agree to lock in your funds for a specific period, during which the bank pays you interest regularly, either monthly, quarterly, or annually, depending on your preference. At the end of the tenure, you receive the principal amount along with the accumulated interest.
Premature Withdrawal of FDs
Sometimes, due to unforeseen circumstances or urgent financial needs, you may need to withdraw your FD amount before the maturity date. This is known as premature withdrawal. However, withdrawing an FD before its maturity date often comes with penalties, which can significantly impact your returns.
The Solution: Linking FDs with Savings Accounts:
To overcome the limitations of premature withdrawals while still enjoying the benefits of high returns offered by FDs, many banks offer the option to link FDs with savings accounts. By linking your FD with your savings account, you can access your FD funds whenever you need them, without incurring penalties for premature withdrawal. This way, you can maintain liquidity while earning attractive returns on your idle funds.
Introducing Indus Multiplier Max Savings Account:
IndusInd Bank offers a unique solution for individuals looking to maximize returns on their savings while maintaining liquidity—the Indus Multiplier Max Savings Account. This account allows you to link your savings account with an FD seamlessly, without the need for any paperwork or bank visits.
With the Indus Multiplier Max Savings Account, you can enjoy the following benefits:
1. High Returns: By linking your savings account with an FD, you can earn higher interest rates on your idle funds compared to a regular savings account.
2. Flexibility: You have the flexibility to access your FD funds whenever you need them without any penalties, ensuring liquidity during emergencies.
3. Convenience: With online account opening facilities, you can open an Indus Multiplier Max Savings Account from the comfort of your home, saving you time and effort.
4. Dual Benefits: Enjoy the benefits of both a savings account and an FD, combining liquidity with high returns on your savings.
In conclusion, linking your FD with a savings account, such as the Indus Multiplier Max Savings Account, offers a smart and convenient way to manage your finances effectively. By maintaining liquidity while earning attractive returns, you can achieve your financial goals with ease and peace of mind.
Open Indus Multiplier Max Savings Account NOW
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
