Fixed Deposit: Many banks have changed the rates of fixed deposits. FD can play an important role in meeting your financial needs during financial crisis. Due to the lack of risk, the loan on FD is easily available and at a low interest rate.
New Delhi. Recently, many banks have changed the rates of fixed deposits. FD can play an important role in meeting your financial needs during financial crisis. It can get out of financial crisis in two ways. First… you can take loan on FD. Second… you can make pre-mature withdrawals. That is, it can be broken before time.
Experts believe that the choice of the first option is much better. Due to the lack of risk, the loan on FD is easily available and at a low interest rate. Many banks including SBI are also providing online facility for this. You can also solve the financial problem by choosing the second option. However, on premature withdrawals, not only do you get less interest but also have to pay a penalty.
Will have to pay more interest up to two percent
If you take a loan under the first option, you will have to pay 1-2 percent more interest than the interest on FD. Suppose, the bank is giving 6 percent interest on FD, then you can easily get a loan at 7-8 percent interest. According to Paisabazaar.com, banks are giving loans up to 85-95 percent of the FD amount. If you have made an FD of Rs 1 lakh, then you can easily get a loan of Rs 85,000-95,000.
If broken before time then double blow
You will get less interest: Suppose, you had made an FD in April 2019 for five years at percentage interest. If you want to break the FD after two years, then the bank will pay only the interest received on the FD of two years.
Penalty will have to be paid: Banks charge a penalty of 0.5 percent to 1 percent for breaking the first FD. Some banks are providing this facility even without penalty.
Can Pre-Mature Withdrawals
Investment advisor Sweety Manoj Jain says that during the financial crisis, the last option should be to break the FD. If you need less money than FD, then it is better to take a loan on it. If the FD is Rs 1.5 lakh and you want Rs 75,000 then it would be better to take a loan. If you need more money than the FD amount, then you can make a pre-mature withdrawal.