FD New Withdrawal Limit: The Reserve Bank of India (RBI) has changed a rule regarding premature withdrawal of money from bank fixed deposits. As of now, banks provide premature withdrawal facility on FDs up to Rs 15 lakh. Now the Central Reserve Bank of India has increased this amount to Rs 1 crore with immediate effect. This means that now if money is needed, the FD can be broken before maturity and investors will be able to withdraw their deposits.
FD New Withdrawal Limit
New FD Withdrawal Limit
two types of FD
Banks offer two types of fixed deposits, which include callable and non-callable. Non-callable FD means that you cannot withdraw money before time i.e. before the FD matures. But this can be done in callable FD. In callable FD, the account holder can withdraw some or the entire amount before maturity. Although the Reserve Bank of India charges some penalty for withdrawal of money before maturity, callable FDs do not have any lock-in period. But non-callable FD gets more interest than normal FD because the money remains blocked in it.
what changed
The Reserve Bank of India had said in a circular on October 26, 2023 that the minimum amount that can be withdrawn prematurely for non-callable FD is being increased from Rs 15 lakh to Rs 1 crore, i.e. 1 Rs crore and below. There will be facility for premature withdrawal of this amount in all domestic fixed deposits. It has been said in the circular that these instructions will also be applicable to NRE deposits and NRO fixed deposits. This circular is applicable to all commercial banks and co-operative banks.
FD can be broken prematurely
According to the Reserve Bank of India circular, ‘Banks will have the freedom to offer NRE/NRO fixed deposits without the option of premature withdrawal. But for amounts of Rs 1 crore and below, all NRE/NRO fixed deposits accepted from individuals will have to provide premature withdrawal facility.
FD New Withdrawal Limit
After the Reserve Bank of India continuously increasing interest rates from May 2022, banks are now offering attractive interest rates on FDs to investors. Earlier this month, RBI Governor Shaktikanta Das had said that there is still scope for further increase in fixed deposit and loan rates.
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