Before maturity, FD has come to break, adopt this trick to avoid penalty – Cross Talk India

Indian investors Fixed deposits (FD) between are the most preferred means of investment. The reason for this is risk free and fixed returns. Due to this, small and big investments invest in FDs. However, the uncertainty of life can come anytime. At that time investors are compelled to break FD before maturity. Banks also take low returns and penalty if they break FD before maturity. If you also do FD, then we are giving you some tricks to avoid this kind of situation. You can reduce the burden of penalty by following them. You can also compensate for the loss of low returns.

Use FD laddering

Use FD laddering to avoid giving penalty on withdrawal before maturity. Do not invest all the money in this FD. Invest by dividing the money into several FDs with different maturity dates. By doing this, you will have the facility to extract parts of your funds at regular intervals. Then you will not need to break FD before maturity.

Sweep-in facility

Many banks offer sweep-in accounts, where when a fixed amount is in a savings account, it automatically moves to FD. Due to this, there is more interest on the amount deposited in FD. Also, whenever money is required, there is a facility to withdraw easily.

Lone on fd

Instead of breaking FD before maturity, taking a loan is also a better option. Banks usually offer up to 90 percent of the FD amount at a slightly higher interest rates than the interest rate of FD. This option helps to avoid punishment while maintaining investment.

FD in government bank

If you may have to withdraw money before maturity, then you should get your FD done in public sector banks. In premature FD withdrawal case, government banks usually charge less penalty than private banks. In public sector banks, the fine is typically between 0.50 percent to 1 percent. At the same time, it gets between 1 percent to 1.5 percent in private sector banks.

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