Earn up-to ₹10,000* more by breaking and reinvesting in latest FDs

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How will the interest be calculated in case of Premature withdrawal?

Suppose you book a 1-year FD at an interest rate of 8.50% p.a. Now, after 6 months, if you wish to withdraw the FD, your final interest rate will be calculated using two things:

1. The bank's FD rate for 6 months.
2. The premature penalty rate, which is typically 1%. 

The premature penalty rate is deducted from the FD rate of the bank for 6 months. 

For example,

6-month FD interest rate = 5%

Penalty for early withdrawal = 1%

Final interest rate at 6-months withdrawal = 5%-1% = 4%

Importantly, your principal amount—the money you initially invested—stays fully protected, even if you withdraw early. The penalty applies only to the interest earned, not to your original deposit. 

The following Stable Money partner banks do not levy any penalty in the case of premature withdrawals:

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In how much time will you receive the money if you place a withdrawal request?

This depends from bank to bank. The table below displays the time it takes to receive your money from a particular bank, after withdrawing.

*Note: On national or bank holidays there might be a slight delay. The money is returned directly to the savings account with which you booked the FD.

Why do banks charge the premature penalty?

Banks offer higher interest rates on FDs than savings accounts because they know they will have your money for a fixed period, which they can utilize to give out loans and provide other services. This creates a promise to others relying on these funds for credit. When someone withdraws early, the bank can’t keep that promise, so they charge a small penalty to cover the loss.