How to Break FD in SBI: Step-by-Step Guide for Online and Offline Withdrawals

Introduction

A Fixed Deposit (FD) is a popular investment option offered by banks like SBI, providing guaranteed returns at a predetermined interest rate. However, sometimes unforeseen circumstances may require you to break FD in SBI before maturity. Whether you want to break your FD online via the YONO app, through internet banking, or offline at an SBI branch, this guide explains the steps, time, and costs involved.

This article provides an educational overview of how to break FD in SBI, the consequences of breaking it before maturity, and how to manage this process smoothly.

What Is Fixed Deposit (FD) in SBI?

A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum amount for a fixed tenure at a specific interest rate. SBI offers different types of FDs with varying tenures and interest rates.

Interest Rates: Higher rates than savings accounts

Tenure: Typically ranges from 7 days to 10 years

Safety: FDs are considered low-risk investments as they are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC)

Once you create an FD, it earns fixed interest, and the principal is returned to you at the end of the tenure unless withdrawn prematurely.

Understanding Premature FD Withdrawal

Breaking an FD before its maturity date is called premature withdrawal. While it allows you to access your money earlier than planned, it comes with certain terms and conditions. SBI offers flexibility in breaking an FD prematurely, but penalties may apply, and the interest rate may change.

How to Break FD in SBI Before Maturity

How to Close FD in SBI YONO App

The SBI YONO app allows you to manage your banking activities, including breaking your FD before maturity. Follow these simple steps:

• Open the YONO app on your phone

• Login using your credentials (User ID and password)

• From the Home screen, go to the “Fixed Deposits” section

• Select the FD you wish to break

• Choose “Premature Withdrawal” and confirm your request

• The app will show you the updated interest rates and penalties (if applicable)

• Follow the prompts to complete the withdrawal process

Once the process is complete, the amount will be credited back to your linked account.

How to Break FD in SBI Before Maturity Online

You can also break your FD before maturity through SBI Online Banking. Here's the process:

• Log in to SBI Online Banking with your username and password

• Navigate to the “Deposit” section

• Choose “Fixed Deposit” from the options

• Select the FD account you want to break

• Choose “Premature Withdrawal” and confirm

• The system will calculate the penalty and new interest rate

• Complete the process to transfer the amount back to your savings or current account

This method is quick and convenient, especially for those who prefer using online banking.

How to Break FD in SBI Offline

If you prefer to visit an SBI branch, you can break your FD offline as well. Here’s how:

• Visit your nearest SBI branch

• Request the bank officer for “Premature Withdrawal of FD”

• Provide necessary details like FD account number and identity proof

• The bank officer will process your request and explain the penalty

• The amount will be credited to your linked savings account after processing

Although offline withdrawal is available, it may take more time

Time Required to Break FD in SBI

The time required to break an FD in SBI depends on the method you use:

• Online Banking (YONO or SBI Internet Banking): Immediate processing (except for weekends or holidays).

• Offline at Branch: Processing time may vary, but typically takes a day or two for completion.

In most cases, the funds will be available in your linked account within 1-2 business days after initiation.

Charges and Penalties for Premature FD Withdrawal

SBI imposes a penalty when you break your FD before maturity. The penalty is typically a reduction in the interest rate, depending on the remaining tenure of the FD. Here’s how it generally works:

• For FD tenure less than 1 year: Penalty of 0.50% on the applicable interest rate

• For FD tenure greater than 1 year: Penalty of 1% on the applicable interest rate

This means that you may receive a lower interest rate than originally agreed upon for the FD.

Can Offline FD Be Broken Online in SBI? Drag

If you have an offline FD (opened at a branch), you can still break it online via SBI’s internet banking or YONO app. Once your FD is linked to your account, you can initiate premature withdrawal through the online platform, and the bank will process the request.

However, if your FD isn’t linked to your internet banking, you may have to visit the branch initially to link it.

What Happens After Breaking FD in SBI?

Once you break your FD:

• Interest Calculation: Interest will be recalculated as per the new applicable rate for the shorter term.

• Penalty: A penalty is levied if the FD is withdrawn before maturity.

• Credit of Funds: After completion of the process, the amount (including revised interest) will be credited to your savings or current account.

Common Misconceptions About Breaking FD in SBI

Some misconceptions regarding breaking FD in SBI include:

• “FD cannot be broken online”: This is not true. Both YONO and SBI Online Banking allow you to break your FD online.

• “Breaking FD early means you lose all interest”: While there is a penalty for early withdrawal, you still receive interest, albeit at a lower rate.

• “Breaking FD always results in a loss”: If you break the FD because of an emergency, the penalty is a small trade-off for access to funds.

Conclusion

Breaking an FD in SBI is a straightforward process, whether done online via YONO or offline at a branch. Though there are penalties for premature withdrawal, the ease of accessing your funds makes the process relatively hassle-free.

Before breaking your FD, it's essential to understand the penalties, interest rates, and timelines involved, whether using the SBI YONO app, internet banking, or in person at an SBI branch.

Disclaimer

This article is intended solely for educational and informational purposes. It does not constitute financial, banking, or investment advice. BondScanner does not provide personalized banking or advisory services through this content.

Readers should consult official SBI communications or bank representatives for specific procedures and rules regarding FD withdrawals.