By Admin 
Fixed Deposit: Fixed deposits are generally considered to be the safest investment. Where, people deposit their money safely for years without any hassle. But, most of the people get their FD done thinking that they will not even look at the deposited money before the completion of the tenure. Very few of you would be aware of how prematurely breaking your FD in case of sudden need can cost you so much and why?
Why can breaking FD be costly?
Most people think that if they break the FD midway, the bank will deduct the maximum amount as penalty. But, in their hurry, people forget that the bank changes the entire account of your profit. For example, if you had made an FD for 5 years and for some reason break it within a year, then the bank will completely refuse to give you the benefit of high interest rate for 5 years.
Alert for UPI users! Payment will be blocked or limit will be reduced, banks are strict on unusual transactions
Not only this, the bank will also fully implement the short term interest rate of only 1 year on those deposited amounts. On the other hand, after the implementation of short term interest rate, your bank will impose a separate penalty of 0.5 percent to 1 percent on it.
After all, what are the different rules of banks?
Always keep in mind that the rules for breaking FD are different in different banks. Due to which some banks work to give some relaxation in fine to senior citizens. Apart from this, ‘no-penalty FD’ is also available in other banks, but in these the interest rate is lower from the beginning as compared to normal FD.
Why can’t you repay the loan before time despite having money? Know what is the strict rule of 12 months
Always keep one thing in mind that if you break the FD prematurely, the number of days your money remained in the bank and the interest earned on it will be considered fully taxable. In such a situation, this tax will be deducted as per your tax slab, due to which the money in hand will further reduce. Therefore, before taking the step of breaking FD, it is very important to know well about the rules and disadvantages of your bank.