Investing in fixed deposits (FDs) is very popular among people. Most people prefer to invest their money in bank FDs. This is because of the security of their funds and the fixed returns they offer.
FDs with different tenures are offered by various banks across the country. In addition to banks, India Post also offers FDs. Today, we’ll explain what happens if a post office FD is broken prematurely. Let’s find out.
Rules for breaking Post Office FD
If you’ve invested your money in a Post Office FD, you can’t withdraw it before the six-month period. Your money is locked in the Post Office FD for six months. After six months, you can withdraw your money from the Post Office FD.
If you withdraw your money from a Post Office FD after six months, you receive a lower interest rate. If you withdraw money before the end of one year, you receive a return at the savings account interest rate, which is 4 percent.
If you break your Post Office FD after one year, you will receive a return 2 percent lower than the fixed interest rate.
Post Office 5 Year FD Rules
If you have invested in a 5-year Post Office FD, you cannot break it before four years. If you break the FD after four years, you will receive the same interest rate as your Post Office savings account. You will also not receive any tax benefits if you break the FD prematurely.
Post Office FD Interest Rates
- 1 year FD – 6.9 percent
- 2-year FD – 7%
- 3-year FD – 7.1 percent
- 5-year FD – 7.5%
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