If you too are facing money problems due to the global Corona Crisis, then your Fixed Deposit (FD) can get you out of this problem. You can withdraw money before the time if needed. However, some penalty has to be paid on this as well. However, this is a sure shot solution that can be availed at your bank.
How much interest will be reduced?
If you are breaking FD ahead of time, then you do not get interested in the rate at which you have FD. For example, suppose you made an FD of Rs 1 lakh at the rate of 6% for 1 year, but you break it only after 6 months and interest in getting at the rate of 5% per annum on a 6-month FD, so in the bank, you will pay 5% interest on your money, not 6%.
How many penalties will you have to pay?
According to the rule of the country’s largest bank SBI, if a person makes an FD of up to Rs 5 lakh, then he has to pay a penalty of 0.50% on breaking it before the FD matures. Similarly, on FDs of more than 5 lakhs and less than 1 crore, a 1% penalty will have to be given for breaking before time. After ensuring the interest, according to the period you have to pay for this your money by deducting .50 or 1% interest according to the FD amount. Most banks charge a penalty of up to 1 percent.
How to understand the complete mathematics of the proposal?
If you provide FD of 1 lakh for 1 year, on which you have to get 6 percent annual interest. In such a case, you will get Rs 106,167 on completion of one year. On the other hand, if you withdraw money after 6 months, you will get interested at the rate of 5 percent, besides a penalty of .50 percent. In this case, you will get a total of 102,469 rupees after withdrawing money after 6 months.
Can a loan be taken on an FD
Under this, you can take a loan up to 90 percent of the value of FD. Suppose your FD is worth 1.5 lakh rupees, then you can get a loan of 1 lakh 35 thousand rupees. If you take a loan on FD, you will have to pay 1-2% more than the interest you get on a fixed deposit. For example, if you are getting 4 percent interest on your FD, then you can get a loan at a 5 to 6 percent interest rate.