RBI Raises Limit Of Premature FD Withdrawal From Rs 15 Lakh To Rs 1 Crore

New Delhi: Premature withdrawals on fixed deposits (FDs) up to Rs 1 crore can be made now with immediate effect as per the new Reserve Bank of India (RBI) rules. Currently, banks offer premature withdrawal facility on FDs up to Rs 15 lakh.

Till now, banks were allowed to offer domestic term deposits (TDs) or fixed deposits (FDs) without a premature withdrawal option, provided that all TDs accepted from individuals for an amount of Rs 15 lakh and below shall have a premature withdrawal facility.

Further, the banks have also been permitted to offer differential rates on interest on TDs based on the non-callability of deposits (i.e., non-availability of premature withdrawal option) in addition to tenure and size of deposits, News18 reported.

“On a review, it has been decided that the minimum amount for offering non-callable TDs may be increased from rupees fifteen lakh to rupees one crore i.e., all domestic term deposits accepted from individuals for amount of rupees one crore and below shall have premature-withdrawal-facility,” the RBI said in a circular dated October 26, 2023.