The banks are planning to impose fine on the premature withdrawal of the fixed deposits. Most of the banks are considering the proposal for implementation. Earlier there was no such penalty on premature withdrawal of the fixed deposits.
There are some public sector banks that have already started to levy on premature withdrawal but the private sector banks were tolerating the practice in order to attract more and more customers to invest with their bank.
For past few months the deposit rates are on a constant rise and that is why there has been a sudden rise in the premature withdrawal of the fixed deposits. Continuous migration of the investors is creating a lot of problem for the banks as such acts were putting unnecessary pressure on the liquidity position of the banks.
Hence, private sector banks have also started taking the situation very seriously . Pioneering the trend in the private sector bank HDFC Bank announced to levy 1 percent interest rate on premature withdrawals.
IDBI Bank also announced new guidelines for the same. The bank announced to impose 1 percent penalty on the withdrawal of the term deposit opened on or after 1 January 2011 however it gave relaxation to the customers that opened deposit account before January 1, 2011.
IDBI Bank said in a statement "Interest payable on prematurely withdrawn deposits will be the contracted rate or the rate applicable for which the deposit remained with the Bank, whichever is lower, less 1 per cent penalty."
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2 comments:
Hi, Could you plz tell me the difference between Bank RD and PostOffice RD ? PO RD interest rate is fixed for 5yrs at 7.5 what about bank RD. Lets say about SBI RD interest rates ?
Actual the opposite of what you said on IDBI bank is true. They indeed stopped premature withdrawel penalty starting from Jan 1, 2011. For more information look at their press release on Jan 4, 2011.
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