Fixed Deposit: Pre-mature withdrawal on Fixed Deposit attracts penalty. A certain amount has to be paid as penalty by the concerned bank. But there are some banks which provide premature withdrawal facility with zero penalty charges.
For example, PNB allows premature withdrawal without penalty to customers under its PNB Sugam Fixed Deposit Scheme. Meanwhile, PNB has made a change in this popular FD scheme. According to the decision of Punjab National Bank (PNB), under the PNB Sugam Fixed Deposit Scheme, now customers will be able to invest up to a maximum of Rs 10 lakh only.
What is Sugam Fixed Deposit Scheme?
The bank said, “Account holders of existing Sugam Fixed Deposits who have mandated for auto-renewal of their FDs on maturity, will get the same interest rate as on FDs.” The bank further said, “However, due to the amendment in the scheme, the amount which is more than Rs 10 lakh at the time of maturity, will be renewed under a separate fixed deposit scheme of the bank.”
Who can invest?
- Individual (Singly or Jointly) or with Joint Account
- Minor who is 10 years of age or more
- Proprietorship/Partnership Firm, Commercial Organization, Company/Body Corporate
- Hindu Undivided Families (HUFs)
- Association, Club, Society, Trust or Religious/Charitable or Educational Institution
- municipality or panchayat, government or semi government body
- Illiterate and blind person can also open account
The minimum deposit amount for PNB Easy Deposit is Rs.10,000 and in multiples of Rs.1 thereafter.
Tenure of PNB Easy Term Deposit
The tenure of an easy term deposit can be anything from 46 days to 120 months, such as 13 months, 14 months, 37 months and 16 days etc. for deposits up to Rs.10 crores.
Premature withdrawal of deposit
The biggest advantage of this scheme is that the depositor has the option of withdrawing any amount before maturity with a minimum withdrawal of Rs.1000. Whenever he needs money, he can withdraw the required amount without breaking the entire deposit amount. By doing this, the principal amount of the term deposit i.e. the value of the original amount will be reduced. No penalty will be levied on partial withdrawal of the deposit.
According to the PNB website, “If the amount bracket is changed due to part withdrawal of the deposit, the rate applicable for the new amount bracket of the deposit will be applicable from the date of such withdrawal.” The depositor can choose to receive interest on a monthly, quarterly or annual basis. If the balance period of the deposit with the bank is 6 months and above, interest will be paid compounded quarterly.
