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FD Rule Change: RBI Amends Deposit Withdrawal Guidelines. Know More Details Here

The RBI announced that the minimum amount for offering non-callable term deposits has been increased to Rs 1 crore from the existing limit of Rs 15 lakh for the bank

The Reserve Bank of India (RBI) has announced amendments to the fixed deposit (FD) rules through a notification on Thursday. The central bank said that the minimum amount for offering non-callable term deposits has been increased to Rs 1 crore from the existing limit of Rs 15 lakh for the bank. This change means that the customers will now have an option to prematurely withdraw their money from fixed deposits (FDs) of up to Rs 1 crore. 

Types Of Fixed Deposits

In fixed deposits, there are two categories offered by the banks, callable FDs and non-callable FDs. Callable deposits allow the customers an option to prematurely withdraw their money from the FD before the completion of their tenure, while non-callable deposits don’t offer this option to the consumers before the tenure of the deposit is finished. This means that once you invest in a non-callable deposit, your money gets locked in the deposit for the entire term of the FD and you can only access your money once the deposit matures. 

According to the notification released by the RBI on October 26, the banking regulator said, “On a review, it has been decided that (i) 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 and (ii) these instructions shall also be applicable for Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits.”

What The Amendments Mean

The notification further stated that these changes are applicable to all commercial and co-operaitve banks and come into effect immediately. This essentially means that earlier if you submitted a deposit below Rs 15 lakh, you were entitled to withdraw your money from the deposit if desired, before the deposit matures. Now, this limit has been extended to Rs 1 crore, indicating that customers will now be allowed to prematurely withdraw their money from their fixed deposits for any deposit up to Rs 1 crore. 

Generally, banks provide higher interest rates on non-callable FDs than on regular deposits.

Also Read : Want To Get A Personal Loan? Know The Documents Required

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